Narendra Modi's move makes Rs 15 lakh crore useless

New Delhi: The Modi government’s move to demonetise Rs 1,000 and issue new Rs 500 bank notes would leave that around Rs 15 lakh crore worthless, as per earlier estimates.   People have been given 50 days to turn in their Rs 500 and Rs 1,000 notes with the banks to get new notes.

Replacing all Rs 500 and Rs 1,000 notes will be a massive task for the banks and the government. There are 16.5 billion notes of Rs 500 in the market. As far as Rs 1000 notes are concerned 6.7 billion notes have been printed and are in circulation in the market.

While the total number of bank notes in circulation rose by 40 per cent between 2011 and 2016, the increase in number of notes of Rs 500 denomination was 76 per cent. As for Rs 1,000 denomination notes were concerned there was an increase of 109 per cent during this period.

“In this period the Indian economy grew by 30 per cent. This means that there has been a very high increase in printing of high denomination of notes,” said economic affairs secretary Shaktikanta Das.

New Series bank notes of Rs 500 and Rs 2,000 denominations will be introduced for circulation from 10th November, 2016. Infusion of Rs 2,000 bank notes will be monitored and regulated by RBI. Introduction of new series of bank notes which will be distinctly different from the current ones in terms of look, design, size and colour has been planned.

In panic, people queue up outside atms
 As the news of Rs 500 and Rs 1,000 notes being banned went viral on social media and instant messaging platforms like Whatsapp on Tuesday evening, the general public panicked and rushed to nearest ATM centers to withdraw lower amount like Rs 400 for currency of Rs 100 denomination.

It was chaos at all ATM centers in the city, especially at the Secunderabad railway station and the MGBS bus station. The situation was worse as ATMs will not function for the next two days.

Mr Pankaj Chaturvedi, a tourist from New Delhi who was returning on Tuesday night, said that he only had Rs 500 and Rs 1,000 notes. “I was shocked when I entered the railway canteen for dinner. The manager of the canteen cautioned me before entering and said that they would not accept these notes. When I tried to withdraw currency in denominations of Rs 100, there was a long queue. If I wait for my turn at the ATM, I will miss my train. I am returning from Hyderabad with an empty stomach,” he said.

A railway staff at the reservation counter said that they were given instruction to accept Rs 500 and Rs 1,000 notes till 12 am. “We shall wait for further instructions after 12 am. If our higher officials direct us to accept these notes, we shall do it,” the staff said. RTC commuters faced a similar experience at MGBS and JBS bus stations.