New Delhi: Over Rs 29.41 crore was spent on use of the IAF ultra-modern transport aircraft — the C-17 and the C-130J Super Hercules — to ferry newly-issued Rs 2,000 and Rs 500 currency notes post-demonetisation, according to an RTI reply. The move to scrap the old Rs 500 and Rs 1,000 notes was announced by Prime Minister Narendra Modi on November 8, 2016, and saw 86 per cent of the currency being sucked out of the system, needing an urgent operation to replenish it with the new Rs 2,000 and Rs 500 notes.
According to the response provided by the IAF, its frontline transport aircraft undertook 91 sorties to transport bundles of currency from security printing presses and mints to various destinations across the country after the Rs 1,000 and the Rs 500 notes were demonetised by the government in a sudden move on November 8, 2016. The IAF, in turn, had billed the government-owned Security Printing and Minting Corporation of and the Bharatiya Reserve Bank Note Mudran Private Ltd Rs 29.41 crore for its services.
According to Commodore Lokesh Batra (retd), who furnished the RTI reply, the government should have avoided using defence assets and instead could have easily requisitioned the services of civil transport aircraft. This situation could have been avoided, had the government fully prepared itself before making the announcement to demonetise currency notes of Rs 1,000 and Rs 500 on November 8, 2016, he said.
Post-demonetisation, the RBI had spent Rs 7,965 crore in 2016-17 on printing the new Rs 500 and Rs 2,000 notes, and those of other denomination, more than double the Rs 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 Rs 500 note per million in circulation and 19.1 pieces of Rs 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 per cent of the junked Rs 500 and Rs 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 the rise in printing and other costs was the diminished dividend RBI pays to the government. The RBI had said its income for 2016-17 decreased by 23.56 per cent, while expenditure jumped 107.84 per cent.
(To receive our E-paper on whatsapp daily, please click here. We permit sharing of the paper's PDF on WhatsApp and other social media platforms.)