GOVERNMENT OF INDIA
MINISTRY OF FINANCE
LOK SABHA

UNSTARRED QUESTION NO: 2845
ANSWERED ON: 02.12.2016
Impact of Demonetization
MD. BADARIDDOZA KHAN
BHOLA SINGH
P.K.SREEMATHI TEACHER
N.K. PREMACHANDRAN
PREM DAS RAI
P. KARUNAKARAN
(SMT.) RATNA DE(NAG)
V. PANNEER SELVAM
C. N. JAYADEVAN
BANSHILAL MAHTO
GEETHA KOTHAPALLI
CHINTAMAN NAVSHA WANAGA
Will the Minister FINANCE

of

be pleased to state:-

GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF ECONOMIC AFFAIRS

LOK SABHA UNSTARRED QUESTION NO. 2845
TO BE ANSWERED ON 2ND DECEMBER, 2016/11TH AGRAHAYANA, SAKA, 1938

Impact of Demonetization
2845. SHRI MD. BADARUDDOZA KHAN:
SHRI BHOLA SINGH:
SHRI C.N. JAYADEVAN:
SHRIMATI KOTHAPALLI GEETHA:
DR. BANSHILAL MAHATO:
SHRIMATI P.K.:
SHRIMATI TEACHER:
SHRI N.K. PREMACHANDRAN:
SHRI P.KARUNAKARAN:
DR. RATNA DE (NAG):
ADV. CHINTAMAN NAVASHA WANAGA:
SHRI V.PANNEERSELVAM:
SHRI PREM DAS RAI:

Will the Minister of Finance be pleased to state:

(a) whether the Government is aware of the hardships being faced by common people due to demonetization of currency and acute shortage of new currency;

(b) if so, the reaction of the Government in this regard and the steps taken in this regard;

(c) whether the Government printed new currency notes anticipating the withdrawal of old five hundred and thousand rupees notes and if so, the details thereof and if not, the reasons therefor;

(d) the main objective behind the said move;

(e) the extent to which demonetization policy has impacted the various sectors of the economy and helped in detecting black/unaccounted money; and

(f) the other steps taken/being taken by the Government to popularise cashless transactions?

ANSWER

MINISTER OF STATE IN THE MINISTRY FOR FINANCE

(SHRI ARJUN RAM MEGHWAL)

(a) & (b) Following the cancellation of legal tender character of old banknotes of high denomination, a number of measures have been announced by the Government, taking into consideration the inconvenience caused to various sections of public due to demonetization. Information regarding measures taken by Government is available at finmin.nic.in.

(c) & (d) It is a prevalent practice to change design of notes from time to time and/or introduce/withdraw denominations of banknotes. Accordingly, in compliance of relevant provisions of RBI Act, 1934 the design of Rs. 500 was changed. The previous highest denomination of Rs. 1000 was introduced in the year 2000. Due to persistent moderate to high inflation since then, the value of the same has been progressively eroded in Purchasing Power Parity (PPP) terms. Simultaneously, disposable income levels and GDP also continued to grow. This factor along with rising requirement for banknotes was the reason for introduction of banknote of Rs. 2000 denomination which was done following provisions of RBI Act, 1934. In view of such circumstances, the introduction of Rs. 2000 denomination banknotes was found suitable to the need of currency demand persisting in the country.

(e) Cash transactions do not leave any audit trail and therefore act as conduit for black money, which cast a long shadow of the parallel economy on our real economy. Elimination of black money will eliminate the long shadow of the parallel economy on our real economy and will be very positive for India’s growth outlook.

(f) Various steps have been taken to popularise cashless transactions viz., waiving the MDR charges till 31.12.2016 by the banks to promote greater use of Debit cards, reducing the USSD charges by TRAI from the current Rs. 1.50 per session to Rs. 0.50 per session for transactions relating to Banking and Payments and waiver of the same by the telecom companies until December 31, 2016, not to levy service char ge of Rs. 20 for second class and Rs. 40 for upper classes on purchase of reserved E-tickets upto 31st December, 2016 and encouraging public to use balances in bank accounts to pay for their requirements by cheque or through electronic means of payments such as Internet banking, mobile wallets, IMPS, credit/debit cards etc. Further, all Government organizations, public sector undertakings and other Government authorities have been advised to promote the use of digital payment methods. Further details are available at finmin.nic.in.

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Category : Fema / RBI (3148)
Type : Featured (4037) News (12048)
Tags : black money (651) Demonetization (439)

2 responses to “Why Govt issued Rs. 2000 Bank notes”

  1. A K.SAREEN says:

    I fully agree. Crores of currency notes of Rs.2000 denomination have been seized by the Income Tax officials. Common man is simply asking the benefit of going digital individually. It is Govt. which only will be benefited. Is Govt. going to offer some extra benefit to a common tax payer paying tax say Rs.25000 per month Vs. the other man not paying any tax at all. There is no social security benefit even to high tax payers who has really contributed to India’s economy. Now after demonetisation when crores of black currency has been seized by the IT officials, this should be distributed to the people of India by way of Income Tax waivers or reducing the tax slabs realising that India has become Sone Ki Chiriya.
    Regards,

  2. Sujit Kumar Das says:

    The Govt.’s decision of Demonetisation may be accepted but the full govt. does know about the real piocture of the common man who are usually being deprived day by day.
    1. Common people do not have any requirement of Rs.2000/- note. The full politician may feel like that.
    2.e-ticket buying: why the same will be with extra cost? Why govt. is charging extra for such transaction? The full politician just find the collect money by hook or crook and that too by any means.
    3. why the concerned person will be liable or rather to sacrifice if there is any fradulent practice for soft money by the cheater? Why the concerned bank or the govt. will not take the sole responsibility of the the monetary loss made by the criminals? The full politician does not think for the common people. In case of any mishap, ther common people will have to move from door of the Police Stantion to the bank or to the door of the court where justice usually comes so late and that too for the politician or the law maker.
    4.We all the politicians are made for doing the politics for the good of the themselves not for the common people.
    5. Please look where the modi govt. is getting the full support from the common people for the Demonetisation, but still the govt is spending a lot of money for doing the advertisement like all the political parties and if they had any guts to take the vote thru social media in favour of such advertisement. The politicians have forgotten that for good work people will be wth them not for their advertisement.
    Ok Sirs, i ahve take a lot of time of yours and so sorry.
    SKDas 9433036600

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