India (Commonwealth Union)_ The latest announcement from the Reserve Bank of India to ban INR 2000 denomination notes sent shocking waves across the country. The RBI further stated that it would remove the INR 2000 note from circulation. According to senior Congress leader and former Finance Minister P Chidambaram, the INR 2,000 note, which has now been withdrawn from circulation, was a foolish act that only facilitated the concealment of illicit money. The minister added that now the red carpet had been rolled out for these individuals to exchange their currency.
In a sarcastic tweet, Mr. Chidambaram ridiculed the government’s claim that the withdrawal of high denomination notes was being done to unearth illicit money. This was his second post on the topic of the government’s decision to remove the INR 2,000 note that was introduced after the shocking demonetization that took place in 2016. According to the government’s announcement, the notes would be removed from circulation. However, it offered time until September 30 for the public to deposit or exchange them at banks.
According to Mr. Chidambaram’s post, banks have announced that no identification, forms, or proof will be necessary to exchange INR 2,000 notes, and that the BJP’s claim that the INR 2000 notes are being withdrawn to unearth illicit money is false. He stated, “Ordinary people do not have ₹ 2,000 notes. They shunned it soon after its introduction in 2016. They were ineffective for daily retail transactions. So, who retained the ₹ 2,000 notes and used them? You know the answer. The ₹ 2,000 note only helped keepers of illicit money hoard their money with ease. The keepers of ₹ 2,000 notes are being greeted on a red carpet to exchange their notes! So much for the government’s declared objective of rooting out black money.” He added, “The ₹ 2,000 note was a foolish move in 2016. I am glad that the foolish decision is being reversed at least seven years later.”
Further, the State Bank of India clarified later that individuals would be permitted to exchange the notes without a form or request paper, and no proof of identity would be required. Multiple exchanges of INR 2,000 to INR 20,000 rupee notes are permitted per day. In a previous post, Mr. Chidambaram referred to the INR 2,000 note as a “band-aid” that was intended to cover up the “foolish decision” to demonetize the INR 500 and INR 1,000 notes. He also added that several weeks after demonetization, the government and the Reserve Bank of India were compelled to reintroduce the INR 500 note.
Mr Chidambaram said, “I shall not be surprised if the government/RBI re-introduced the ₹ 1,000 note as well. Demonetization has come full circle!”. Even though the INR 500 and INR 1,000 notes were rendered worthless overnight as a result of the notes ban in 2016, the government has said that the INR 2,000 note would continue to remain legitimate. Former NITI Aayog Vice Chairman Arvind Panagariya, in an attempt to defend the decision to withdraw INR 2,000 notes, stated that it would not have a “perceptible effect” on the economy and that the probable motivation was to make the movement of illicit money more challenging.
