New Delhi: India has stopped printing Rs 2,000 notes in a bid to slowly stop their circulation, a highly placed government source told ThePrint.
The decision comes on the back of suspicion in the Modi government that the high-denomination banknote was being used for hoarding, tax evasion and money laundering.
The RBI, India’s central bank and currency-issuing agency, did not respond to an email from ThePrint seeking comment. This report will be updated when it responds.
The Rs 2,000 note was introduced in November 2016, after the government demonetised Rs 1,000 and Rs 500 denominations as part of an exercise pitched as a crackdown on black money. At that time, to counter the massive cash shortage, the government flooded the country with new Rs 2,000 notes.
As of March 2018, the total value of the currency in circulation was Rs 18.03 lakh crore, of which Rs 6.73 lakh crore, or 37 per cent, was in Rs 2,000 notes, and Rs 7.73 lakh crore, approximately 43 per cent, in Rs 500 notes. The remaining was in the lower denominations.
Also read: This is what global experts have found studying demonetisation, while Modi looks away
When the Rs 2,000 note was introduced, the Narendra Modi government was criticised for bringing out a note of such a high denomination considering it had cancelled the Rs 1,000 note.
Opposition parties had argued that the Rs 2,000 note would further help money launderers and tax evaders, and backfire on one of the government’s stated aims for demonetisation — checking tax evasion and money laundering.
These fears seemed to have come true last April when many Indian cities reported a massive cash shortage. The government suspected cash hoarding ahead of state elections, as well as stocking of money by people in the aftermath of the PNB-Nirav Modi bank fraud.
The income tax department also reported massive seizures of Rs 2,000 notes during this period.
The critics included bankers, with Uday Kotak, the managing director of Kotak Mahindra Bank, questioning the government’s move to bring in Rs 2,000 notes while phasing out Rs 1,000 notes.
Also read: Demonetisation hit growth by 2% points, says paper by Gita Gopinath & 3 other experts
The squeeze in the circulation of the Rs 2,000 notes started some time back.
The RBI’s annual report, released in August 2018, showed that only 7.8 crore notes of the Rs 2,000 denomination were added in 2017-18, taking the total number of bills in circulation to 336.3 crore as of March 2018.
In 2016-17, 328.5 crore Rs 2,000 notes were in circulation.
The share of the Rs 2,000 notes in the total currency in circulation has come down as well: In March 2018, it was recorded at 37.3 per cent, a fall of nearly 13 percentage points from 50.2 per cent as of March 2017.
In contrast, the printing and circulation of the new Rs 500 note has been stepped up. India added 958.7 crore Rs 500 notes in 2017-18, with 588.2 crore notes in circulation the previous year.
The share of the Rs 500 notes in the total currency in circulation has increased too, from 22.5 per cent in March 2017 to 42.9 per cent in March 2018.
After demonetisation, 50 lakh lost jobs over 2 years: report
Mumbai: As per a report released by the Centre for Sustainable Employment, Azim Premji University, almost 50 lakh people lost their employment between 2018 and 2019 after November 8, 2016, when Prime Minister Narendra Modi announced that Rs 500 and Rs 1000 notes would not be considered as legal tender.
As per the report, the beginning of the decline in employment rate coincides with the government’s note ban in 2016 but no “causal link” can be built up based on the information, says the report titled ‘State of Working India 2019’.
The employment losses are higher when women are taken under consideration. The women workforce participation has also lowered, the report said.
According to the report, “Whether or not this decline was caused by demonetisation, it is definitely a cause for concern and calls for urgent policy intervention,”
A government report which was leaked in January this year also recorded that the unemployment rate in India rose to a 45-year high in 2017-2018.
The overall unemployment rate was pegged at around 6 per cent in 2017-2018, according to the National Sample Survey Office’s (NSSO) Periodic Labour Force Survey, held between 2017 and 2018.
But NITI Aayog vice chairman Rajiv Kumar said the report was “not verified” and the “veracity of the data was not known”.
The report said unemployment has largely been driven by higher-educated men in both urban and rural areas, those in the age group of 20 to 24.
“Clearly, there is a large differential impact by level of education. This is consistent with the idea that the informal sector, where we can expect the share of less educated men to be higher, was hit hardest by demonetisation as well as the introduction of GST,” the report noted.
Mallya laments ‘airline karma’ in message for cash-strapped Jet Airways
London: Embattled liquor tycoon Vijay Mallya on Wednesday took to social media once again, this time to express his solidarity with Jet Airways founder Naresh Goyal and repeat his own offer to repay all the money he owes to India’s public sector banks.
The 63-year-old, fighting his extradition to India on charges of fraud and money laundering amounting to an alleged Rs 9,000 crores, claims private airlines were discriminated against by the Indian government, which bailed out state-owned Air India but did not assist his own Kingfisher Airlines and now Jet Airways.
“Even though Jet was a major competitor to Kingfisher at the time I feel sorry to see such a large private airline on the brink of failure when government used 35K crores (Rs 35,000 crores) of public funds to bail out Air India. Just being a PSU is no excuse for discrimination,” Mallya wrote on Twitter. He added: “I invested hugely into Kingfisher which rapidly grew to become India’s largest and most awarded airline. True, Kingfisher borrowed from PSU Banks as well. I have offered to pay back 100 per cent but am being criminally charged instead. Airline Karma?”
The former Kingfisher Airlines boss took yet another swipe at the media as well, claiming every offer he makes to pay back funds owed by his now-defunct Kingfisher Airlines to PSU banks resulted in reports that claim he is “spooked, terrified etc” of being extradited from the UK back to India. “I am willing to pay either way whether I am in London or in an Indian Jail. Why don’t Banks take the money I offered first,” he questioned.
On a more personal note directed at Jet Airways founder Goyal and his wife Neeta, the UB Group chief expressed his sympathy for the troubles being faced by the cash-strapped private airline, which has been forced to cancel a string of flights amid a mounting crisis. “Even though we were fierce competitors, my sympathies go out to Naresh and Neeta Goyal who built Jet Airways that India should be extremely proud of. Fine Airline providing vital connectivity and class service. Sad that so many Airlines have bitten the dust in India. Why,” Mallya questioned.
Mallya remains on bail as he awaits an oral hearing to be listed by the UK High Court for his appeal against his extradition ordered by Westminster Magistrates’ Court in London last December and then signed off by UK home secretary Sajid Javid in February. A first level of that written appeal has already been rejected by the High Court, where it will now be considered during a brief hearing to determine any grounds to grant permission for Mallya’s appeal to proceed to appeal substantive hearing.
The businessman faces a series of unrelated legal battles in the UK courts, including a USD 40-million claim brought by drinks giant Diageo and an attempt by Swiss bank UBS to repossess his posh London home overlooking Regent’s Park. Meanwhile, a State Bank of India (SBI) led consortium of 13 Indian banks continue their attempt to enforce a worldwide freezing order upheld by the UK High Court in May last year through a number of follow up court orders to try and recoup some of the GBP 1.145 billion owed to them.
BMW to recall 360,000 China cars over Takata airbags
Shanghai: Germany’s BMW will recall 360,000 vehicles in China as part of the worldwide effort to root out defective airbags made by now-defunct Japanese supplier Takata, regulators in Beijing said.
Around 20 people have died in accidents linked to defects in Takata airbags since 2013, prompting a massive worldwide recall of at least 100 million cars from a wide range of manufacturers.
The recall will affect nearly 273,000 models built by BMW’s joint venture with Chinese manufacturer Brilliance Automotive and more than 87,000 imported BMW cars, China’s State Administration for Market Regulation said.
The agency said in statement posted on its website late on Tuesday that a defect could cause the airbags to eject debris at passengers if deployed. It did not mention any specific incidents caused by the BMW-installed airbags.
The China recall affects more than two dozen different BMW models built between 2000 and 2018, including several each in the i, X and M series, along with other models.
The suspect parts will be replaced for free, the notice said. Founded in 1933, Takata went out of business in 2017 because of the airbag crisis.
The BMW announcement came as global carmakers were gathered for the Shanghai Auto Show amid a rare sales slump in the world’s largest vehicle market.