₹29.41 cr. spent on ferrying new notes post-demonetisation

IAF flew 91 sorties to fetch bundles

Over ₹29.41 crore was spent on using the Indian Air Force’s ultra-modern transport aircraft — the C-17 and the C-130J Super Hercules — to ferry the new ₹2,000 and ₹500 currency notes post-demonetisation, according to an RTI reply.

The move to scrap the old ₹500 and ₹1,000 notes was announced by Prime Minister Narendra Modi on November 8, 2016, and saw 86% of currency being sucked out of the system, needing an urgent operation to replenish it with the new ₹2,000 and ₹500 notes issued after demonetisation.

According to the response provided by the IAF, its frontline transport aircraft, the C-17 and the C-130J Super Hercules, undertook 91 sorties to transport bundles of currency from security printing presses and mints to various destinations across the country after the ₹1,000 and the ₹500 notes were demonetised by the government on November 8, 2016.

As on November 8, 2016, there were 1,716.5 crore pieces of ₹500 and 685.8 crore pieces of ₹1,000 notes in circulation, totalling Rs 15.44 lakh crore, about 86% of the total currency in circulation, according to RBI and government data.

Billed govt. ₹29.41 crore

In its RTI response to Commodore Lokesh Batra (retd.), the IAF said it has billed the government-owned Security Printing and Minting Corporation of India and the Bharatiya Reserve Bank Note Mudran Private Ltd to the tune of ₹29.41 crore for its services.

“I am of the opinion that the government should have avoided using defence assets and instead could have easily requisitioned the services of civil transport aircraft,” Batra told PTI.

This situation could have been avoided, had the government fully prepared itself before making the announcement to demonetise currency notes of ₹1,000 and ₹500 on November 8, 2016, he said.

Post-demonetisation, the RBI had spent ₹7,965 crore in 2016-17 on printing the new ₹500 and ₹2,000 notes, and those of other denomination, more than double the ₹3,421 crore it had spent in the previous year.

The demonetisation was hailed as a step that would curb black money, corruption and check counterfeit currency, but the RBI, in its annual report for 2017, had said just 7.1 pieces of ₹500 note per million in circulation and 19.1 pieces of ₹1,000 notes per million in circulation were found to be fake in its sample survey.

The Bankers’ Bank had said that as much as 99% of the junked ₹500 and ₹1,000 notes had returned to the banking system, which had prompted the opposition to question the efficacy of the government’s unprecedented note ban decision to curb black money and corruption.

Following the note ban, old notes were allowed to be deposited in banks, with unusual deposits coming under the Income Tax department’s scrutiny.

A collateral damage as a result of rise in printing and other cost was dividend RBI pays to the government.

The RBI had said its income for 2016-17 decreased by 23.56% while expenditure jumped 107.84%.

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