69% of the Indians Demand Rs. 1,000 banknote back in circulation

Way2Online has released insightful data on use of Indian currency post-demonetization that saw the arrival of latest banknotes of Rs. 500 and Rs. 2,000 across the country. Following a vast market survey conducted to determine the state of currency exchange rate, the survey reported that an overwhelming 69% of the population responded with 'YES' when it was asked that if there is a need for Rs. 1,000 denomination note.

It all started when Indian PM Narendra Modi sent shock waves across the nation when he declared that Rs 500 and Rs. 1,000 will no longer be legal tender, which constituted 85% of nation's currency notes. At that time, it was reported that the evolutionary move was to achieve two key objectives: eradication of black money & shift towards cashless economy.

Although electronic payments peaked in December 2016 to 957.50 million transactions as per as per the Reserve Bank of India (RBI) soon after the note ban, the volume came down to 862.38 million transactions in July, 2017. This number is still high as compared to 671.49 million in November, 2016, but it forced the government to accept the fact that no leap can be giant enough for it to suddenly transform the economy into cashless mode. Moreover, having released the new Rs 500 and Rs 2,000 bills for easy swapping of old notes, the choice of denominations severely hurt the section of population that deal with smaller denomination notes.

Thus, in a bid to fill the gap and ease cash transactions by guaranteeing getting change for larger denomination notes, the government introduced Rs. 200 banknotes on 25th August, 2017, which could, according to RBI, also prove to be the main link in the Renard series. The Series, employed by several other countries, rules that the variation among the currency notes should be such that the successive denomination is either twice or two and a half times the previous denomination.

Following the launch of the new banknote, Way2Online conducted a survey with a sample size of 2 lakh people, and sought their response regarding the launch of Rs 200 note and if they feel that the new currency bill will solve their problems of tendering change for higher denomination.

Raju Vanapala, CEO and Founder, Way2Online said on the survey’s findings, “Our extensive research showed that 62% of the surveyed people faced 'tender exact change' problem ever since the Rs. 500 & Rs.2,000 notes replaced the earlier demonetized notes, while a considerable 38% stood firm that they had no issue getting the change.When asked if the newly rolled out Rs. 200 bill will help in fixing the problem, more than half of the respondents, at 67%, were positive that it would ease the cash transactions. However, a considerable 17% of the surveyed citizens claimed that the new currency note will make no difference, while remaining 16% stated that they have no idea how the new bill will affect the physical transactions.”

Interestingly, of the 62% who acknowledged having trouble with having to tender exact change, only 44% believed that the RBI's Rs. 200 move will solve the problem, while 10% of them are convinced that the current ratio is too big to be filled with just a single denomination note. Moreover, a minor 8% are unaffected with it, probably hinting at the fact that they've either accepted digital payments as a mode of transaction or they have apprehensions about the availability of the new notes.

Apart from that, while a noticeable 31% said that there's no need for the RBI to introduce any more currency values, 44%of people who gave a thumbs up for the Rs. 200 note also asserted the need for the re-monetization of Rs.1,000 banknote.This clearly establishes the fact that although majority are pleased with the introduction of Rs. 200 note, the single denomination alone will not be able to resolve problems with the present currency system.

Furthermore, if the government doesn't give second thoughts to reintroducing Rs. 1,000 denomination notes, the survey suggests that the launch of Rs. 200 may not yield expected results or have the kind of impact the government was hoping for among the masses.