Demonetisation: The real reason for introduction of 2000 Rs notes revealed

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It has been a well debatable topic after the Modi government introduced the 2000 Rs and 500 rs currency notes on 8th Nov and surely this day will be remembered for many coming generations.

The topic is why did the Modi government banned the Rs 1000 Notes and introduced the 2000 Rs notes. People are all confused. Here are some of the reasons that will confirm you why this was important and why Rs 2000 Notes were introduced in the market

Reason 1:

The question of why the new Rs 2,000 note, which works against Harvard University's Peter Sands' theories to extinguish high-value bills and Ken Rogoff's curse of cash. Take it akin to a temporary pain-killer for the economy. A post-surgery balm, which ought to be phased out once the new notes of lower denomination are in place. Indeed, the government could have perhaps done better by violating the rule of relative sizes of notes. In India, larger denominations are made in larger sizes to help the illiterate and the blind identify currency easily. In this case, perhaps the government could have, in the interests of replacing currency inside ATMs faster with no recalibration, made the Rs 2,000 note the size of the old Rs 1,000 note.

15.7 billion notes of one denomination and 6.3 billion notes of another denomination were in circulation. The printing capacity is 3 billion notes per month. For notes with the same value denomination, it would take seven months to replace, of which three months of printing are already done. But with the Rs 2,000 denomination, it will take half the time to replace similar value notes, so another two-three months of printing will bring back the same value of notes as currently in circulation. In future, high-denomination notes will be kept to a limited proportion of money supply.

(Source: http://www.businesstoday.in/magazine/cover-story/demonetisation-is-whatsapp-moment-in-economic-reforms/story/241206.html)

Reason 2:

Sir, I am a practising Chartered Accountant aged 28 in Surat and I was very hopeful that you would support the Notification for Demonetization of Currency and was very eager for your Reaction because your very entry into Politics was for supporting any small move to reduce Black money and Corruption and after all, this was indeed a very big and bold move….!

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As you have stated in your Video that it took full 2 days for you to understand the various aspects of the Scheme and even after consultation with various Experts , you could not basically understand the Logic of why 2000 Rupee Notes were released instead of 1000 Rupee Note, I would like to make an attempt to tender my best possible logic ( Please enlighten me if I am wrong somewhere) as follows:

Sir, let us Simply take 2 Scenarios to understand the funda !
Scenario A : If as per your suggestion , Rs. 2000 Note are not issued but only New Rs. 1000 Notes are issued.
Lets say , for example Mr. X has Rs. 1,00,000/- black money in 100 Old Notes of Rs. 1000 each.
Mr. X divides those Rs. 1,00,000/- into 10 Equal Bundles, each comprising of 10 Old Notes of Rs. 1000 each and puts each Stack on a Table.

Important Viral letter from CA Mehul Shah to Kejriwal, why 2000 Rs needed.



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