Rs 2,000 notes form 43% of unaccounted cash seized; hoarding of currency on decline
BusinessToday.In November 20, 2019
While Finance Minister Nirmala Sitharaman said at the Rajya Sabha on Tuesday that hoarding of Rs 2,000 notes is on the decline, the currency also forms a bulk of unaccounted income and assets. According to the data quoted by FM Sitharaman, 43.22 per cent of unaccounted cash seized in the current financial year till date were in the denomination of Rs 2,000. The amount was more than 60 per cent in the last two fiscals.
In a written reply to Rajya Sabha, FM Sitharaman, quoting an analysis of search cases involving cash seizures of more than Rs 5 crore, said that Rs 2,000 note formed 67.91 per cent, 65.93 per cent and 43.22 per cent of the cash seized in financial years 2017-18, 2018-19 and 2019-20 (till date).
The government emphasised that a declining trend was visible in the hoarding of Rs 2,000 notes.
"To bring transparency in the source of funding to political parties, the provisions of section 13A of the Act have been amended to inter alia provide that no donations of Rs 2,000 or more shall be received otherwise than by an account payee cheque drawn on a bank or an account payee bank draft or use of electronic clearing system through a bank account or through electoral bonds," said the finance minister.
The Rs 2,000 notes were introduced on November 8, 2016 when Prime Minister Narendra Modi announced the demonetisation of Rs 500 and Rs 1,000 notes. The announcement of Rs 2,000 notes was met with criticism from experts.
Recently, the former Department of Economic Affairs secretary Subhash Chandra Garg said that Rs 2,000 notes were primarily used for hoarding. He added that withdrawing the currency from circulation would not cause any disruption. Garg had said that the Rs 2,000 notes account for one-third of currency notes in circulation in terms of value. "A good chunk of Rs 2,000 notes are actually not in circulation, having been hoarded. Rs 2,000 note, therefore, is not presently working as a currency of transaction," he added.