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IAF charged Rs 294 mn to ferry new currency notes post-demonetisation

IAFs frontline transport aircraft, the C-17 and C-130J Super Hercules, undertook 91 sorties to transport bundles of currency from security printing presses to various destinations across the country

Press Trust of India  |  New Delhi 

Cash, Demonetisation, Currency

Over Rs 294.1 million 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 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 on November 8, 2016, and saw 86 per cent of currency being sucked out of the system, needing an urgent operation to replenish it with the new Rs 2,000 and Rs 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 Rs 1,000 and the Rs 500 notes were demonetised by the government in a sudden move on November 8, 2016.

ALSO READ: Demonetisation effect: Demand for cash rises 7%, says RBI

As on November 8, 2016, there were 17.16 billion pieces of Rs 500 and 6.85 billion pieces of Rs 1,000 notes in circulation, totalling Rs 15.44 trillion, about 86 per cent of the total currency in circulation, according to Reserve Bank of India (RBI) and government data.

In its RTI response to Commodore Lokesh Batra (retd), the 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 Rs 294.1 million 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 Rs 1,000 and Rs 500 on November 8, 2016, he said.

Post-demonetisation, the RBI had spent Rs 79.65 billion in 2016-17 on printing the new Rs 500 and Rs 2,000 notes, and those of other denomination, more than double the Rs 34.21 billion it had spent in the previous year.


ALSO READ: Demonetisation impact contained? Cash with public doubles since note ban

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 RBi 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 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 per cent while expenditure jumped 107.84 per cent.

First Published: Sun, July 08 2018. 16:27 IST