One of the reasons that prompted the government to withdraw Rs 500/1,000 rupee notes from circulation is that their circulation was not in line with the economic growth, said Economic Affairs Secretary Shaktikanta Das.
Das said between 2011-2016, the circulation of all notes grew by 40 per cent “but the circulation of 500 rupee notes went up by 76 per cent and 1,000 notes by 109 per cent. Between 2011-2016 the economy expanded by 30 per cent”.
He said Reserve Bank of India (RBI) will release new currency notes from November 10 onwards.
Das said control rooms will be set up in RBI in Mumbai (022-22602201/22602944) and in the Union Finance Ministry (011 23093230) here.
He said the state governments have been informed on the government’s decision.
Terming the government’s move to withdraw 500/1,000 rupee notes as a bold and powerful one, he said it is a measure to fight black money and fake notes that is financing terrorism.
“This one is a more effective and decisive measure,” he told reporters here.
He said security features of legal tender had not been breached but there are huge number of fake notes that common man is not aware of.
Reserve Bank of India Governor Urjit Patel said the decision to devalidate 500/1,000 currency notes was taken at an opportune moment as one can exchange the old notes with new ones.
“Over the past week we have ramped up production of the new notes,” he said.
Das also appealed to the public not to exchange old notes on behalf of others.
According to him, more number of new Rs 2,000 notes have been printed in order to ease the process of exchange the old 500/1,000 rupee notes.
Patel said there is confluence of thought between RBI and the central government which led to the decision to make Rs 500 and Rs 1,000 currency notes no longer legal tender.
He said in the coming days, new notes would replace the old ones and there will be no impact on market liquidity.
“We will ensure so that there is no disruption in any of the markets controlled by us,” Patel added.
According to Das, the infusion of Rs 2,000 currency notes will be monitored and regulated by RBI. Banks will keep records of those who exchange the old notes for new. The information would be shared with the Income Tax department.