As per a highly placed source in the government, quoted in the report, Modi-led NDA government has chose to stop the printing of the Rs 2000 notes on suspicion that the banknote was being used for hoarding, tax evasion and money laundering. Of the total currency in circulation amounting to Rs 18,037 billion at the end of March 2018, Rs 2000 notes accounted for 37.3 per cent, down from 50.2 per cent at the end of March 2017.
While Garg cleared the air around printing of Rs 2,000 notes, there have been several reports in the past which indicate that Rs 2,000 notes, released after demonetisation, is not necessary anymore. To counter the massive cash shortage, the government introduced new Rs 2,000 notes. The government, however, had denied any plans to withdraw the Rs 2,000 notes yet.
The squeeze in the circulation of the Rs 2,000 notes started some time back. However, the government wants to slowly phase out the currency note.
According to the finance ministry official quoted above, the central bank and the government decide from time to time the quantum of currency notes to be printed on the basis of money in circulation.
In 2016-17, 328.5 crore Rs 2,000 notes were in circulation.
Notably, on November 8, 2016, Prime Minister Narendra Modi had announced demonetisation of Rs 1,000 and Rs 500 notes as part of an exercise pitched as a crackdown on black money. The remaining is in lower denominations. The income tax department also seized a huge number of Rs 2,000 notes during this period.
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