Come December 31, when rest of the world will welcome the New Year, the Reserve Bank of India (RBI) will be trying to sort out a unique situation on how to deal with more than 23 billion worthless bank notes. The pile is likely to be 300 times the height of Mount Everest. It could even be long enough to reach the moon and back five times.
On November 8, Prime Minister Narendra Modi in an address to the nation had announced demonetisation of Rs 500 and Rs 1,000 to fight the black money menace within the country. During his speech the PM had also given time till December 30 for the people to deposit cash. He added that those who deposit upto Rs 2,50,000 won’t be questioned by the income tax officials.
As per the livemint website, the step has earned both admiration for its bold step and criticism for its execution for the government. Each year, the RBI spends more than $400 million on currency production, which is about 1.5% of the global bank note industry.
Most discarded notes will be dumped in landfills after usual process used with soiled notes, a senior RBI official was quoted as saying by the website. He added that many will also be turned into briquettes for industrial purpose, while some could be converted into paperweights
In India, most consumer payments are done through cash, and the high frequency of handling forces the monetary authority to withdraw about 75 percent of its notes in circulation in a typical year — more than the number of bank notes produced by all nations taken together apart from China.