Along with the Rs 1,000 notes, that is also on the anvil, Rs 200 notes will take care of the problems due to the big gap at present between the Rs 500 and Rs 2,000 notes in circulation.
If not for anything else, just for the ease of transaction, the need for a currency denomination that will take care of the problems created by the big gap between Rs 500 and Rs 2000 notes, that are in circulation currently, has been felt since the demonetisation of old Rs 500 and Rs 1000 notes. So, the government and Reserve Bank of India (RBI) decision to introduce Rs 200 notes, as reported by The Economic Times, is a welcome move, as it will help in eliminating the missing middle problem.
At present, the Rs 10, Rs 50 and Rs 100 notes are available besides Rs 500 and Rs 2000 notes, and introduction of Rs 200 would take care of much of the problems in consumer transactions. With the help of demonetisation last year, the government had decided to withdraw Rs 500 and Rs 1000 notes, accounting for 86% of the total currency in circulation of Rs 17.9 lakh crore.
According to the latest data, the currency in circulation today, as compared to the pre-demonetisation period, is still 18% lower. This gap will be filled with the Rs 200 notes and also the Rs 1,000 notes — The Indian Express reported earlier that the Rs 1,000 notes are also expected to be introduced soon.
These two denominations, along with the new Rs 500 notes, that constitute majority of the currency brought in post-demonetisation, will help in bringing the currency circulation in the country to a balanced level. The newly added security features in these notes would also mean that the chances of counterfeiting will also get minimised.
In effect, this whole process will complete the demonetisation exercise in terms of replacing the old currency taken out of circulation. But, the real success of demonetisation would still depend upon how far the investigating agencies, including the income tax department, are able to find out how much of the unaccounted income or black money has come back to the system through the deposits of old Rs 500 and Rs 1000 notes. This is certainly going to be a time-taking exercise.