According to the latest reports in the news, the Reserve Bank of India — apparently! — is all set to begin the printing of the ₹ 200 notes, which are to be issued and introduced in the coming few months. While it has been fairly evident (from our own personal inconveniences in our day-to-day monetary transactions) that we needed a strong move from the government in terms of remonetising the economy. The 100 rupee note was simply never enough…and I do not just mean “money-wise”!
In fact, it had become quite a challenge to go shopping for small items or spend money on small-ticket purchases. After all, tendering exact change is easier said than done. Thus, whether one is buying groceries or taking a cab, more often than not…people have been forced to (a) either look for someone willing enough to give change for their 200 note or (b) either forego their remaining change. Either which way, it has proved to be source of inconvenience for the people. For they will either they lose their time (trying to look for exact change) or lose their money (by foregoing the remainder of the balance).
This is why, I am sure that this news regarding the “remonetisation drive” has come as a welcome piece of news for everyone. Although, there is something else too that the government would need to keep in mind. Even though, the step being taken is a welcome step and is sure to remove many hassles, I have my misgivings about the step being enough?!? After all, ₹ 200 is still not a high-denomination currency, which means that the demand and supply gap between high-value and low-value currency is bound to continue.
Or in other words, the demand for ₹ 200 note will be higher (just as it is now for the ₹ 100 note) for the same reason. ₹ 2000 is too high a denomination for everyday low-ticket purchases.
While it is true that it is bound to take time for the newer currency denominations to be decided, for new currency bills to be printed and for them to be rolled out into the economy, the truth is…we certainly need a currency note of a much higher denomination to plug-in the gap between the current demand and supply of ₹ 100 notes in the market. Of course, whether they will be our older ₹ 500 or ₹ 1000 notes is something for the government to decide.
But the truth is, the gap between ₹ 200 and ₹ 2000 is just as high as the gap between ₹ 100 and ₹ 2000. Which means that the government — in its remonetisation drive — will have to think of introducing other currency notes in other denominations between the two so that the public can conveniently carry out their monetary transactions so they they neither have to run from one shopkeeper to another in the hope of getting some change for their higher-denomination note; nor be forced to make unnecessary purchases in the hope of getting some loose change. Moreover, it will also ensure that they are not taken for a ride by people who claim to have no change. I mean…after all, how long can we keep saying — “Keep the change”! Hence, it’s time to bring in some more change (pun intended)!
