<!– /11440465/Dna_Article_Middle_300x250_BTF –>In a bid to help the common man with the demonetization process, the government has been pressing the Indian Air Force (IAF) into action. From assisting in the functioning of currency printing presses 24×7 to airlifting cash, the IAF has already transported 610 tonnes of currency and will continue to do so over the next few days.”The Air Force has played an important role in lifting currency. We have done 35 sorties and transported 610 tonnes of cash till now, said Air Chief Marshal Arup Raha on Wednesday.”We have also helped in running one of the mints 24×7,” he added.The decision to rope in the IAF was taken about 10 days after Prime Minister Narendra Modi announced demonetization—making old Rs 500 and Rs. 1000 notes illegal and replacing them with new ones.It is unprecedented for IAF to transport cash which is usually done by train. Sources said since it was an “emergency-like situation” the IAF had been roped in to bring down delays in currency, reaching different centres across the country.The four currency printing centres are located in Nasik (Maharashtra), Devas (Madhya Pradesh), Mysore (Karnataka) and Salboni (West Bengal). Sources said the employees at the press have been working overtime to meet the cash demands in the country.From close by airfields in Mysore, Indore, Ozar and Kalaikunda, IAF planes are carrying out sorties almost daily to meet requirements.”The cash is transported by road to the airfields from where the Air Force transports it to different centre. This is saving time in transportation,” said a government official. The aircraft being used for transporting the currency are C 130, C17 and AN 32, sources said.Once the cash reaches the destination the local authorities take charge.Sources said initially there was a shortage in currency as the printing machines lacked the capacity to meet the increased demands. The government had announced printing of new Rs. 1000 notes but that has not begun yet.”While the Rs 2,000 notes and Rs 500 notes are being printed the void left due to non printing of Rs 1,000 note has created a crunch,” said a government official dealing with the subject.Officials privy to the details said out of a total currency requirement of 17.5 lakh crore, Rs 8 lakh crore is expected to be in 500 and Rs 7 lakh crore in 1,000 denominations. “10 per cent of this demand is being met per month,” the official added.The rest of the demand is to be met with other notes including Rs 2,000.
<!– /11440465/Dna_Article_Middle_300x250_BTF –>With a surge in demand for smaller denomination notes, the Reserve Bank of India (RBI) has put soiled notes—mainly of Rs 100 and lower denominations—back into the system, along with a fresh supply of Rs 10 coins.According to the available data, as on March 2016, RBI had in its possession 16,368 million pieces of soiled notes, a substantial portion of which is back in circulation. These are notes that are collected by the banks from the customers as part of replacing soiled and torn notes. Once handed back to the RBI, the notes are examined by a committee and then destroyed.A senior official from the Punjab National Bank said, “We have received soiled notes and have started distributing it. Since there is a currency crunch, whatever supplies we are getting are being made use of. The soiled notes are not mutilated ones, but worn out or partially torn.”It’s estimated that these soiled notes will be in circulation for a couple of months till banks get enough supply of new currency. “Even if we make the printing presses work overtime, it may take a few months to bring the situation back to normalcy since we have sucked out 84 per cent of our currency,” said the executive director of a south-based private sector bank.Meanwhile, a RBI release said that the new coins to be distributed will come with distinctive features reflecting India’s socio-economic-cultural ethos.Fake notes in playAccording to a senior banker, as many as 6,32,926 pieces of counterfeit notes were detected in the banking system during the last fiscal. Of this 95 per cent were detected by commercial banks.While 2,21,447 pieces of fake Rs 100 notes were confiscated by the banks, 2,61,695 pieces of Rs 500 notes were detected. In Rs 1,000 denomination, 1,43,099 pieces were detected.During 2015-16, the RBI had printed 21.2 billion pieces, while it was 23.6 billion pieces the previous fiscal. In value terms, Rs 500 and Rs 1,000 notes together accounted for 86.4 per cent of the currency in circulation, but going by volume, Rs 10 and Rs 100 bank notes constituted 53 per cent of the total currency in circulation.The value of the Rs 1,000 notes was Rs 6,32,600 crore from 6,326 million pieces in circulation and the value of the Rs 500 notes was Rs 7,65,400 crore from 15,707 million notes in circulation, according to RBI data.Bharatiya Reserve Bank Note Mudran Pvt Ltd, a wholly owned subsidiary of the RBI which runs two banknote printing presses in Mysore and Salboni, produced 14,714 million pieces of banknotes of different denominations as against its annual target of 15,700 million pieces in 2015-16.There are four currency presses – one each in Nashik (in Maharashtra), Dewas, (Madhya Pradesh), Salboni (West Bengal and Mysuru (Karnataka). The Nashik and the Dewas presses are owned by Security Printing and Minting Corporation of India Ltd.
New Delhi: Will new notes which replace the demonetised currency find itself in circulation soon? Unlikely, if the capacity of all the currency printing presses in the country is taken into account.
The latest calculation, based on capacities of the currency printing presses, shows that replenishment would take around six months. This is particularly true for the new Rs 500 notes, whose printing, presumably, started after 10 November. Till those are replenished in adequate numbers, the “currency pain” would not go away since Rs 2,000 notes are difficult to exchange for lower denominations.
However, enough of the new Rs 2,000 notes may already have been printed, calculations show.
The central government had demonetised Rs 500 and Rs 1,000 currency notes on 8 November, sending the whole nation into a tizzy. Long queues outside banks have been a daily occurrence since then because enough currency notes are not available with them.
New information gleaned from public sources show that the government may be too optimistic in claiming that “adequate amount” of money would soon be in circulation.
That’s because of the limited capacity of the printing presses in the country for such a sudden, huge job.
There are four currency presses — one each in Nashik (Maharashtra), Dewas (Madhya Pradesh), Salboni (West Bengal) and Mysuru (Karnataka).
The first two are owned by the central government through the Security Printing and Minting Corporation of India Ltd. According to information available in the Finance Ministry’s latest annual report, the yearly currency printing capacity of these two presses is around 40 per cent of the total in the country.
The other two presses — in Salboni and Mysuru — are part of the Bharatiya Reserve Bank Note Mudran Pvt. Ltd. (BRBNMPL), a wholly-owned subsidiary of the Reserve Bank of India (RBI). These two, comprising 60 per cent of the total capacity, can print 16 billion notes in two shifts per year, according to information available on BRBNMPL’s website.
In essence, it means that total capacity in the country would be 26.66 billion notes in two shifts. If all three shifts run, as the government says is happening now, the four presses would be able to print 40 billion notes a year, irrespective of the denomination.
Now, according to the government, the total money in circulation — before Rs 500 and Rs 1,000 notes were declared illegal — was Rs 17.54 lakh crore or Rs 17,540 billion. Of this, 45 percent was in Rs 500 denomination — equivalent to Rs 7.89 lakh crore or Rs 7,890 billion and 39 percent in Rs 1,000 notes amounting to Rs 6.84 lakh crore or Rs 6,840 billion.
In other words, there were 15.78 billion notes of Rs 500 denomination in circulation and 6.84 billion notes of Rs 1,000. But if they are going to print Rs 2,000 notes equivalent to value of the Rs 1,000 notes declared illegal, that is, worth Rs 6.84 lakh crore, they would have to print only half, or 3.42 billion notes.
If the printing started in early September, as has been claimed by some printing press officials, they would need only a little over two months to meet the full requirement, even at 50 per cent capacity. In other words, they should have printed all the replacement needs of Rs 2,000 notes till now.
Further, how long will they need to print Rs 500 notes, now that the machines would not be printing Rs 2,000 notes? Assuming an 80 per cent run (remember Rs 500 and Rs 1,000 comprised 84 per cent of all currencies), the time taken for the new Rs 500 notes, which began printing, presumably, on November 10, would be: 5.9 months.
The rest of the 20 per cent capacity could be used for the lower denomination notes from Rs 5 to Rs 100. So, by April-end, one would presume, all the new notes would be in circulation. And, of course, the pain would be longer than the 50 days that Prime Minister Narendra Modi has mentioned.
First Published On : Nov 17, 2016 18:33 IST
<!– /11440465/Dna_Article_Middle_300x250_BTF –>There seems to be some relief in sight for people waiting in queues after the demonisation announcement. On Sunday, there were reports of the new Rs 500 notes being issued in Bhopal and Delhi.The Currency Note Press in Nashik has also reportedly dispatched the first consignment containing five million pieces of the new Rs 500 notes to the Reserve Bank of India.A TOI report quoted an official saying, “The CNP has already sent the first consignment of five million pieces of the new Rs 500 note and another five million pieces are to be dispatched by Wednesday”.Though, the new Rs 2000 currency was circulated from November 11, the new Rs 500 notes were not in circulation till Saturday. The printing of new currency notes is reportedly being carried out in printing units in Nashik and Madhya Pradesh’s Dewas. In addition, RBI has made arrangement for printing at two units in Mysore and Salboni in West Bengal as well. Around 400 million pieces of the Rs 500 notes are expected to be printed by the end of this financial year.
ALSO READ War on Black Money: Rajnath, Jaitely take stock of situationIn a “battle” against black money, Prime Minister Narendra Modi had made an announcement saying that old Rs 500 and Rs 1000 notes would not be legal tender starting midnight on November 8. This sent a wave of panic across the country, wherein people have been rushing to banks, ATMs and post offices to get their old currency exchanged. In a statement on Saturday, Finance Minister Arun Jaitley said that deposits worth Rs 2 lakh crore were received so far by the banks, not taking into account the notes pouring in at post offices.
Virtually launching the campaign for the ensuing assembly election in West Bengal, former chief minister Buddhadeb Bhattacharjee on Saturday called upon Congress and other Left parties to join hands with the CPI(M) to defeat Trinamool Congress and indicated that industrialisation would be a major issue.Visiting Singur, from where the Tata group had shifted their Nano car project to Gujarat, for the first time after eight years, Bhattacharjee said, “If the (Nano) factory was set up here, situation would have changed in Singur. But only darkness prevailed”. He kicked off the week-long procession from Singur to Salboni, where JSW group had promised to set up a Rs 35,000 crore steel plant.<!– /11440465/Dna_Article_Middle_300x250_BTF –>Alleging that no new factory was set up in the state during the TMC rule, he said, “We will change the situation. We can do it,” adding, “We want the Congress to make its stand clear in this regard. We want Congress and other Left parties to join hands with us to oust the TMC government”. Indicating that industrialisation of the state would be a big issue in the ensuing poll, Bhattacharjee said that both agriculture and industry are needed.”But agriculture alone is not sufficient and industry is required as thousands of educated youth want employment.Mocking at the TMC government, he said, “This Ma-Mati-Manush drama can’t be allowed to run any longer. We will save Bengal”. Bhattacharjee’s call to Congress came in the wake of similar statements by CPI(M) state secretary Surjya Kanta Mishra and another politburo member Md Selim.Turning to the JSW group’s Salboni steel project, he said, “that would have been implemented by now but nothing came up. The state has turned into a hell and it lagged behind”. He alleged that whatever industry was there, they were closing down. “The tea gardens, where everyday workers’ death is reported, never faced this kind of situation,” he said.Referring to his presence at Singur, Bhattacharjee said, “Initially I thought whether I should go or not. Then I thought I should say something at this point of time which brought me here.”He also slammed Chief Minister Mamata Banerjee saying, “Everyday some festival is organised. She asked the unemployed to produce ‘muri’ (puff rice) and ‘telebhaja’ (a kind of snack). Is she doing mockery with the umemployed? This can’t go on. Time has come to make a turnaround,” he said. He also alleged that a total anarchy prevailed in the state and people were being killed while the “police is busy shielding the leaders of the ruling party”.Speaking on the occasion, Left Front Chairman Biman Bose strongly criticised the TMC government alleging that it has failed to govern the state and deliver goods. “Law and order in the state is deteriorating. Police is working as stooge of the ruling party and the state has no democracy,” Bose said. He also warned that if their procession was attacked on its way to Salboni from Singur, “The state will be on fire. But we don’t want to do this, rather we are for rebuilding the state”.