Seems that the new design notes especially the 2000 Rs. denomination note is taking the social media by storm. And now the prime minister banned the 500 Rs and 1000 Rs notes in India stirring up the speculation more.
But several things aren't adding up here. A lot of speculation adding to the confusion about the governments new policy change. Let me point out some extraordinary contradictions on this topic.
The following points make me doubt about the speculation in many ways.
The goal of the expected issuance.
Before banning of 500 and 1000 Rs. Notes
Since the currency of India is continually depreciating and weakening against the dollar on current conditions, the necessity for a higher denomination to catch up with the value makes sense. And the newer version of other denominations along with 2000 Rs. denomination may have thought of containing some added authenticity measures.
After banning of 500 Rs. and 1000 Rs. Notes
The first thought was that new notes will replace the old notes and the goal was as replacing old ones with new ones having some GPS chips, that can easily tell the locations of the same.
Let me break these trivia into pieces for a clearer understanding.
1) It is now clear that those new notes definitely not for just denomination purposes and abolition of 500 Rs and 1000 Rs. notes today eliminated this fact. There is no point in issuing such denominations with more authenticity while abolishing them to prevent black money.
2) Since the objective isn't for denomination value or authenticity, and it was speculated that the new currencies would have microchips to trace such notes to eradicate black money in the future. It all make some point in the narrative. But here is the contradiction
3) The measure to eradicate black money, the GPS chip technology, the banning of 500 Rs. and 1000 Rs. are interwoven and dependent on each other for a perfect validation.
a. The injunction of an embedded GPS chip inside a paper like material is impossible as of now.
b. Even though it is possible with some high tech,
i) It will increase the cost of production of notes which eventually make losses in printing of money. ii) It is against the privacy of a citizen as the government can track a citizen with such notes. It may act as like a surveillance system for the government.
iii) Any technology is vulnerable at some point, since they are using just GPS technology, a thief or some stalker can identify a location of a person with some amount currency and can lead him to unforeseen consequences. The life of a person holding such currency is at stake when security of such system is compromised. Since constant upgrades of technology of printed currency cannot be possible without compromising the production costs of such currencies and that can erase a lot of value in the process without making any significant output.
iv) The speculations even say that the micro chip is of a reflective type that can send back the location details to a satellite of a person. It seems to be completely wrong. The GPS is a one way communication technology and it cannot send the details back to a satellite by itself. In fact, No embedded technology in a printed currency could achieve this in any sane way.
c. The message from Modi is yet unclear whether meant about abolition of 500, 1000 denominations entirely or just the old versions of it. d. Even abolition of 500 and 1000 denominations completely have some effect on the black money eradication, it may also disrupt the efficiency of the current banking system in managing the flow of money.
The situations and their bottlenecks observed by me are:
1) We can't drop the 500 and 1000 Rs denominations completely without affecting the efficiency of banking system. But it would certainly increase the liquidity and recovering some or all of the black money is a definite possibility.
2) If the abolition only plays around the old issues of notes, by replacing it with new ones with some upgrades in authenticity measures. It may have a temporary recovery of black money, and cannot help in the long run.
3) If those new issues have a technology such as GPS, NFC to address the black money problem. It will do more danger to the society than the black money does. And it is completely against the privacy of each and every citizen. It is blatant breach of the fundamental rights of the citizens of India. Moreover, the person holding such currency has his life at stake.
4) And it isn't viable ethically, technically or economically to embed a chip in a currency. I am not yet sure about the plan that is in place for the problem.
In any possibility, the situation 1 or 2 is more practical than others and 1 is more beneficial. Let us hope the same to happen.
I believe the rest of the speculations around the new notes are either fake or rejected. If it isn't, we are all screwed up. Hope for the best !!!
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