New Delhi, December 14: The rebooting of the currency notes by the so called demonetization scheme is never going to fall. The great and boldest move by the BJP government and the deadline of 50 days is going to get over. We are 17 days away from Prime Minister Narendra Modi’s 50-day deadline assured to all of the Indian people.

Many media houses have been reporting continuously regarding its failure, but no one is understanding and thinking from the Rs 2000 notes point of view.

The reason to understand this would be first to understand what and why the printing of the Rs 2000 note have done.

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.

Now coming back to the point

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.

Say if the Rs 2000 notes started to printing from the day of introduction, still a lot must have been achieved in printing this note  till date and in another 10 to 15 days the government must have balanced all the notes in the market, including rs 500 notes.

Going by this calculation one can assume that though there can be some shortage of money here and there but the major percent of money will be printed, until and unless excessive hording of money is not being done again.

About The Author

Chetan Sharma is an Indian fact-checker and news writer, writing news for Ayupp since 2014.

You Might Be Interested In

Latest On