Extracting Venom

Below chart is to display how Rs.500 and Rs.1,000 had raised its head like a serpent and started creating problems in the economy. 

It seems to remove the venom from the hood demonetization was required.

The data for the above chart is presented below: 

2015-16 (Rs. In billions)
Small Coins	7.00	Re. 1 Notes	3.09
Re. 1 Coins	41.78	Rs. 2 Notes	8.53
Rs. 2 Coins	59.26	Rs. 5 Notes	36.80
Rs. 5 Coins	70.45	Rs. 10 Notes	320.15
Rs. 10 Coins	37.03	Rs. 20 Notes	98.47
		Rs. 50 Notes	194.50
		Rs. 100 Notes	1577.83
		Rs. 500 Notes	7853.75
		Rs. 1000 Notes	6325.68

Hope the venom is replaced and The Snake is saved.

The big question why all these years instead of printing higher percentage of Rs.100 notes why percentage of Rs.500 and Rs.1,000 notes were drastically increased.

As a percentage of total notes printed in value terms ( excluding coins):

- Percentage of Rs.1,000 increased from 2% in 2000-01 to 40% in 2015-16.
- Percentage of Rs.500 increased from 27% in 2000-01 to 49% in 2015-16.

Below is graphical representation of domination of Rs.500 and Rs.1,000 note denomination:

	Rs. In Billions
Year	Rs. 50 Notes	Rs. 100 Notes	Rs. 500 Notes	Rs. 1000 Notes
2015-16	194.50	1577.83	7853.75	6325.68
2014-15	174.36	1502.65	6563.91	5612.45
2013-14	172.42	1476.46	5702.48	5081.37
2012-13	173.05	1442.10	5359.50	4299.00
2011-12	174.38	1411.88	5128.07	3468.81
2010-11	159.80	1402.43	4453.11	3027.13
2009-10	210.57	1383.64	3644.79	2382.52
2008-09	244.40	1370.28	3083.04	1917.84
2007-08	265.08	1345.75	2631.08	1412.19
2006-07	279.51	1354.44	2254.00	936.76
2005-06	278.42	1346.37	1823.32	643.46
2004-05	299.41	1232.82	1527.28	420.82
2003-04	330.27	1214.42	1229.38	274.73
2002-03	351.91	1153.86	938.13	159.71
2001-02	356.01	1180.41	685.12	71.79
2000-01	328.18	1081.41	529.47	37.19

I hope same mistake is not committed by RBI, instead gradually Rs.2,000, Rs.1,000 and Rs.500 as a percentage becomes not more than 10% (in value terms) of the notes printed.

It is acceptable if printing machines are running round the clock for printing lower denomination notes.

Survival of Rs.1, Rs.2 and Rs. 5 notes

It was difficult to accept that Reserve Bank of India still prints Rs.1, Rs.2 and Rs. 5 notes. This may come as surprise as in cities like Mumbai, Delhi etc. people seldom catch sight of these notes.

In fact value wise these notes have increased with passage of time i.e. since 2001. 

Below data will display in Rs. Billions the value of notes i.e. Rs.1, Rs.2 and Rs.5:

	Rs. In Billions
Year	Re. 1 Notes	Rs. 2 Notes	Rs. 5 Notes
2015-16	3.09	8.53	36.80
2014-15	2.99	8.54	37.02
2013-14	2.99	8.51	37.14

The increase of very small denomination notes over a period of 15 years have been very consistent despite a flat trajectory in the last four years.

Let’s start searching for these notes.

Source:

Thankful to Reserve Bank of India website.

Link: https://dbie.rbi.org.in/DBIE/dbie.rbi?site=publications#!2 (December03, 2016)