After announcing the demonetisation of the Rs 500 and Rs 1000 notes on Tuesday, the Indian government has announced that it will introduce a new Rs 1000 note in the coming months.
The announcement was made by Shaktikanta Das, economic affairs secretary. “In the coming few months Rs 1000 notes will be brought in with a new design,” he said.
The demonetisation of the higher currency notes has thrown India into chaos. Banks and ATMs were shut down the next day of the announcement. On Thursday morning, long ques were seen outside all banks with people rushing to change their notes.
Finance Minister Arun Jaitley said at the annual Economic Editors’ conference Thursday, “Small deposits will not face any question or harassment of any kind.”
“It is Indian tradition to keep some cash at home for exigencies. The revenue department is not going to take notice of these depositors,” Jaitley said. But black money hoarders will definitely find it tough, he said.
The government will reintroduce Rs 500 notes along with Rs 2000 notes into the market but it may take a few months.The RBI wanted to introduce Rs 5000 Rs 10000 notes, but the plan was struck down by the government. “The planning process of this switchover has been done over the last few months,” Das said. “The RBI will monitor and regulate the release of Rs 2000 notes.”
The minister said that people may have to face some difficulty in the initial few days but things will settle down after some time.
With money in short supply, consumer spending will be impacted. Jaitley said as a large part of the money was static, the move will get it back into circulation and things will even out. In the long-run, it will benefit the economic growth of the country, he added.