Nripendra Misra hails withdrawal of Rs 2,000 notes as big blow to black money

The RBI has given citizens time till September 30 to deposit or exchange Rs 2,000 notes.

Former principal secretary to Prime Minister Narendra Modi, Nripendra Misra, hailed the Reserve Bank of India's move to recall the Rs 2,000 currency notes from circulation.

“The prime minister’s determination to curb black money and tax evasion will get strengthened by the withdrawal of Rs 2,000 notes. The PM has always viewed parallel economy of black money as a curse to sound economic management. He has shown his faith by this measure,” Misra said.

The RBI in May 19 issued a statement, saying that it was withdrawing the Rs 2,000 notes from circulation based on a review. However, the central bank added that the banknotes will continue to be legal tender.

Won't affect daily life

Misra stated the withdrawal of the highest denomination in Indian currency is different to demonitisation and that this move will not affect the common citizen.  "It is not demonetisation at all. In fact, PM Modi was not keen on issuing Rs 2,000 currency notes in the aftermath of demonitisation in 2016 but he went ahead after taking the consensus. The Rs 2,000 currency has a limited shelf life as it’s a high currency note. The common person use Rs 100 and Rs 500 and not the Rs 2,000. So, they won’t be affected.

"This move will help curb black money and those who have Rs 2,000 notes have nothing to be worry About. Just go and exchange or deposit the money in to your account," he said.

Demonetisation 2016

Misra was the principal secretary to PM Modi between 2014 and 2019. The Centre announced the cancellation of the legal tender of Rs 1,000 and Rs 500 (old series) notes in November 2016 in an effort to curb black money and fake Indian currency notes. The government's rationale was that such high-value notes were being used by tax evaders and hoarders.

The move triggered an acute shortage of cash as the government and the RBI struggled to remonetise the economy with 86 percent of the currency in circulation being withdrawn from the banking system. The decision and the consequent plight of people had pushed the government to face a political storm.

But, the demonetisation of 2016 is different from the recalling of Rs 2,000 currency notes in 2023 are different, and we have covered the differences in our story here.

More support

Former RBI deputy governor R Gandhi has backed the withdrawal of Rs 2,000 notes from circulation as he feels it will help in curbing black money to a “great extent", PTI reported.

Gandhi, like Misra, was also part of the demonitisation 2016, as he was leading the currency department during at that time. He told PTI that any systemic impact on payments is unlikely because the notes are not used in day-to-day payments, something the RBI had touched upon in its press release.