this highest currency note printed by the Reserve Bank of India (RBI) in circulation have decreased over time.
“As against 3,363 million pieces (mpcs) of ₹2,000 denomination banknotes in circulation on March 31, 2018 constituting 3.27 per cent and 37.26 per cent of NIC [notes in circulation] in terms of volume and value respectively; 2,233 mpcs were in circulation on November 26, 2021, constituting 1.75 per cent and 15.11 per cent of NIC in terms of volume and value, respectively,” Pankaj Chaudhary, Minister of State in Finance Ministry, wrote in a note to the upper house of Parliament.
He noted that the decision to print banknotes of a particular denomination is decided by the federal government, in consultation with the RBI, in order to ensure the desired denomination mix that is required to facilitate the transactional demand of the public is maintained. Accordingly, the decline in the number of ₹2,000 notes in circulation is a result of several factors, he said.
“The decrease in circulation of ₹2,000 note issued after demonetisation is because no fresh indent has been placed for printing of these notes from 2018-19 onwards. Further, notes also go out of circulation as they get soiled/mutilated,” Chaudhary told the Rajya Sabha.
In a separate note, the minister pointed out that economic growth, the interest rates and several other macro-economic factors determine demand for currency in an economy. He further noted that during the 2020-21 fiscal year, precautionary demand made by the public on account of the economic uncertainties caused by the pandemic also played a significant role in this regard.
“Combination of greater public demand for cash and a contraction in GDP has led to an increase in Currency in Circulation (CiC) as percentage of GDP from 12 per cent during 2019-20 to 14.5 per cent during 2020-21,” Chaudhary said.
