Rs 1,000 Notes To Be Reintroduced, Says Economic Affairs Secretary

The Reserve Bank of India will monitor the release of newly introduced Rs 2,000 currency notes, and will reintroduce Rs 1,000 notes with new design and security features, Economic Affairs Secretary Shaktikanta Das said at a press briefing on Thursday.

On Tuesday, the government demonetised the Rs 500 and Rs 1,000 notes, and will replace it with Rs 2,000 and new Rs 500 notes.

Das also told reporters that new notes of all denominations will be introduced in a phased manner with new design and features. Currency notes of lower denomination – Rs 100 and Rs 50 – will continue to be the legal tender, he said. The Reserve Bank of India will also issue a new series of such notes with new design and added security features.

Outlining the impact of the government's decision on public finances, Chief Economic Advisor Arvind Subramanian told BloombergQuint that some unaccounted wealth will not come back in the system, "instead of seeing it as a deduction or reduction of unaccounted wealth, it should be seen as a transfer of unaccounted wealth from the private sector to the government and public sector. That unaccounted money which hasn't come back in the system will be a boost to RBI and the government. It is not a wealth reduction for the economy but a wealth transfer."

Small Traders, Households Shouldn't Worry

After Revenue Secretary Hasmukh Adhia said late on Wednesday that cash deposits above Rs 2.5 lakh will face a tax and in case of an income mismatch, an added penalty, the government on Thursday has made it clear that that citizens can deposit Rs 500 and Rs 1,000 currency notes up to Rs 1-2 lakh without fear.

Small traders,cash savings in households,self employed small businesses can deposit 500/1000 notes upto 1 or 2 lakhs without fear.

For Jan Dhan accounts, the limit for cash deposits has been set at Rs 50,000, Minister of State for Finance and Corporate Affairs told BloombergQuint.

Centre, State To Accept Old Notes Till November 11

The finance ministry also said in a separate statement that old Rs 500 and Rs 1000 notes will be accepted for making payments towards fees, charges, taxes and penalties payable to the central and state governments including municipal and local bodies till November 11.

These notes will also be accepted for making payment of utility charges for water and electricity bills.

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