Common misconception :- Notes are being destroyed and it is all going waste.
Nothing is going waste.
If a note is not returned to the bank before March 31, 2017. It means Govt of India and in turn you are richer by the value of those currency notes.
Just imagine if there is 2 lakh crores out there which cannot be returned by individuals because they will be caught, prosecuted and jailed. They will not return it and Govt of India is richer by that much amount.
If you give it to the RBI you can demand for a replacement.
If you don't give it RBI, then RBI will not be liable to replace it for you.
But, RBI will still print a new note. This time it will give the new notes to the Govt of India.
When RBI prints notes it knows how many notes of what value it is printing.
When people return them for replacement RBI will know how many notes come back and how many did not come back and were destroyed or burnt or used as toilet paper.
If say 1 lakh of 1000 rupee notes are NOT returned to RBI by March 31st/2017. RBI will print 50,000 of 2000 rupee notes and gives it to the government to spend.
Its like putting it back in your pocket (govts pocket) by taking it from a person who evaded taxes and blacked it.
To reduce the cost of replacing the existing currency. In fact Govt will save at least 5000 crores.
Remember Govt is not increasing or decreasing the total money in the economy.
It is just replacing notes.
For every 10 nos of Rs 1000 you give back, you will get only 5 Rs 2000 notes.
Cost of printing a 100 rs note is say 1.50 rs Cost of printing a 1000 rs note is say 3 rs. Cost of printing a 2000 rs note will be marginally higher at say 3.5 rs.
So you spend only 17.50 Rs to print five of 2000 rs note instead of spending 30 rupees on printing 10 of 1000 rupees or 150 rs on 100 of the 100 rupees note.
Yes, hoarding will happen again but total supply of notes is reduced to half. Leads to less availability of high value notes.
And next time Modi wants to recall he will have less number of notes to recall and replace.
Do you think moving forward people will actually dare of store notes under the bed or in sacks rather than depositing in banks by paying some tax on income?
They will at least declare it as Income saying I grew Apples in the deserts of Rajasthan and made this money on agricultural activity.
Some people are complaining of poor quality notes. The quicker they get damaged the sooner they are deposited in banks. They reach the RBI for replacement sooner. Reduce the shelf life and reduce the hoarding of cash at home under the mattress.
Yes, blackmoney will be near zero now and grow again with crooks piling up 2000 rupee note....But, does it not ring a bell in your mind that a man who has demonitised 500 and 1000 rupee note can de-monitise 2000 rupee note also in the future...? Hopefully there should not be a reason for this, because the black money hoarders will be few and far between who can be caught by other acts... And most corrupt babus getting fat salaries now may opt out of bribes... transparancies in governance may make them redundant...People may opt for digital and plastic currencies...so dont you think India has a better chance with this action..?
Re: How come such smart people write such dumb articles...?
by Prasad Kulkarni on Nov 10, 2016 09:10 PM
Exactly! There is no dearth of Dumb people in India. They only know to make noise and oppose.
