Indian economy contains best brains in World. We are not enough to predict any thing but in democracy everyone has right to represent own views. RBI will have enough evidence to launch two thousand currency notes.
Here we will try to assume few aspects that may be behind this decision.
Government can’t remove black money in single process. It would be series of processes. Few has been implemented and many is going to be implemented. We have to study the pattern of last 2 year’s finance related decision to take some idea about processes. First government emphasizes to open bank account under Jan Dhan Yojana. Under this scheme huge number of accounts has been opened. Then Government give a time limit for declaration of black money and suddenly Government bans 500 and 1000 currency notes. If we study these processes deeply, we find it like Sizing/Sieving/filtration phenomena.
In Sieving, numbers of sieve are used to classified different size of particles. Particles of biggest size are collected at upper sieve and particles of finest size are collected at lowest sieve. Banning of 500 and 1000 currency notes are definitely a sieve in sieving process. It is of any of one sieve that will separate particles of any particular size from others but it may be top most but can’t be lowest sieve. Lowest sieve is to come.
What will be next step, no one in condition to predict? High dimension notes are major reason of money accumulation due to easy storage and produces black money. Then how can government launch 2000 rupees currency notes after knowing all possibilities. Persons who have taken such a major step to remove black money from India can take such a silly step of launching 2000/- currency note. There will solid reason behind it or it may be part of next filtration process.
To understand it we can take an example, when some phone get spoiled what you do first. You purchase a second cheap hand phone or use an old phone available with you till you have enough money to buy new phone. That may be in case of current situation. Two thousand currency notes may be launched only for preventing currency crises and maintain enough money into market. Two thousand currency notes bears less manufacturing charges and can easily fill the currency distribution gap easily.
Why 2000 currency Notes?
- If our prediction is correct, 2000 currency notes are going to be banned as soon as government meets new currency distribution target and economy becomes stable. Two thousand currency note’s launching decision is unpredictable and will be launched after going into deep discussion. There will be much reason behind it.
- First and most important reason is to completely destroy value of 1000 rupees currency notes. Government want to create mind set, there isn’t any currency related to one thousand. This will helpful in removing any possibility of 1000 rupees circulation in market.
- Second reason, two thousand rupees note’s manufacturing cost is half if we calculated manufacturing cost of two one thousand notes. Government will prevent manufacturing cost in only one case i.e. only to prevent currency crises. When this purpose will be sorted out, Government can taken step to demonetize newly launched two thousands notes.
- Third, Persons who have black money and from any mean he will successful to convert it with new currency. He will definitely store it in form of 2000 rupees currency notes. At that time 2000 rupees currency notes banning will act as narrow sieving.
What it will be going to happen, we don’t know but what is happening is seemed to be good for our country future.