PM Modi was not in favour of Rs 2000 notes, gave reluctant permission: Nripendra Misra

Prime Minister Narendra Modi was not in favour of Rs 2000 notes coming into circulation but reluctantly agreed to it after he was told that there was a lack of capacity to print smaller currency notes as demonetisation has to be done in a limited time, Nripendra Misra, former Principal Secretary to PM Modi has said. Nripendra Misra told ANI in an exclusive interview that PM Modi never considered Rs 2000 note as note of the poor, he knew Rs 2000 (note) has hoarding value instead of transactional value,” Nripendra Misra said. He said PM Modi was also not in favour of currency notes being printed outside the country. Misra said it was decided during the demonetisation exercise, carried out in November 2016, that the currency notes that had been taken out of circulation (Rs 500 and Rs 1000) had to be replaced with new notes in a given period of time. “In the period that the (demonetised) notes were to be deposited and new notes brought out, the capacity to print (new notes) was less and the option was to bring Rs 2000 note.

The team that was working made the proposal that Rs 2000 notes will have to be printed in the wake of limited time. The Prime Minister was not at all enthused,” Misra said. He said PM Modi felt that the effort was to tackle black money and if a bigger denomination note comes then the capacity to hoard will increase. “When he was told about the capacity to print currency notes, and that even if two-three shifts are held, the target cannot be met..the only alternative left was to print Rs 2000 note for a limited period,” he said. “The Prime Minister, in principle, was against it but for practical considerations, he reluctantly agreed. There was not an iota of doubt in his mind that when there is adequate capacity in the future, Rs 2000 note should be discontinued,” Misra said. “You would have observed that Rs 2000 notes were not being printed since 2018,” he added. Misra, who was Principal Secretary to PM Modi from 2014 and 2019, said that RBI has also not been bringing back to circulation “soiled” Rs 2000 notes that came to it from banks.