Big fall in Rs 2,000 notes seized in income tax raids

NEW DELHI: The government on Tuesday said that the share of Rs 2,000 notes seized during searches conducted by the income tax department has declined from close to 68% in 2017-18 to around 43% so far this year.

While the highest-denomination currency note remains the dominant mode of stashing illicit wealth, the declining trend may also be linked to the government and the Reserve Bank of India (RBI) going slow on the flow of new Rs 2,000 notes in the system.

Besides, there are fears that the government may phase out these notes, prompting those with unaccounted cash to replace them with other notes.

 “An analysis of the search cases involving cash seizures of more than Rs 5 crore in the last three financial years has been carried out. This analysis reveals that the percentage of unaccounted cash seized in denomination of Rs 2000, out of the total cash seized is 67.9%, 65.9% and 43.2% in financial years 2017-18, 2018-19 and the current financial year till date, respectively. Thus, a declining trend is visible in the seizure of unaccounted cash in denomination of Rs 2000 notes,” finance minister Nirmala Sitharaman said in response to a Parliament question as she listed out a host of measures initiated by the government over the last few years.

While the Rs 2,000 notes were launched post-demonetisation to quickly replace cash in the system as the old Rs 500 and Rs 1,000 ceased to be legal tender, the fresh stock of notes entering the system has slowed down.

In March 2017, Rs 2,000 currency notes accounted for over half the notes in circulation, which has now fallen to 31%. The number of notes in circulation too has decreased from over Rs 6.7 lakh crore in March 2018 to under Rs 6.6 lakh crore in March 2019, RBI data showed.

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