Rs 1000 notes to make a comeback with new design

Gaurav ChoudhuryMoneycontrolThe government said on Monday that Rs 1000 currency notes, banned as part of the crackdown on black money will be reintroduced in a few months in a new design and security features.“In the coming few months Rs 1000 notes will be brought in with a new design,” Economic Affairs Secretary Shaktikanta Das said.The government on Tuesday scrapped Rs 500 and Rs 1000 notes from midnight tonight as part of the strategy to clamp down on India’s bustling parallel cash economy.New Rs 500 and Rs 2000 notes will be issued by February 2017Prime Minister Narendra Modi made the surprise announcement in an unplanned address to the nation stunning households, businesses and traders and forcing people out of homes to queue up in ATMs.People have been given 50 days (From November 10 to December 31) to deposit notes of Rs 500 and Rs 1000 in any bank or post office without any limit.Addressing the annual Economic Editors’ conference, finance minister Arun Jaitley said people making “small deposits will not face any question or harassment of any kind.”“It is Indian tradition to keep some cash at home for exigencies. The revenue department is not going to take notice of these depositors,” Jaitley said“Only those who have large amounts of undisclosed amounts, will have to face the consequences under the tax laws,” he warned.The RBI’s original view, according to inflation indices, was to introduce Rs 5000 Rs 10000 notes. The government did not accept it.“The planning process of this switchover has been done over the last few months,” Das said. “The RBI to monitor and regulate the release of Rs 2000 notesDas also said that market regulator SEBI is considering allowing FIIs in commodities trading, but no decision has been taken yet.Jaitley said that there could be a temporary impact on consumption growth as people’s spending will come down in the short-run.“The large part of this currency was also lying static. Once the replacement takes place, the current levels of consumption will come back,” Jaitley said.“There are some sectors (like construction) that have been conventionally cash intensive. In the short-term there could be some impact, but will even out in the long run,” he added.