Our Prime Minister on 8/11/2016 when he announced the
demonetisation of high value denominations, told to the nation that:
“Terrorism is a frightening threat. So
many have lost their lives because of it. But have you ever thought about how
these terrorists get their money? Enemies from across the border run their
operations using fake currency notes. This has been going on for years. Many
times, those using fake five hundred and thousand rupee notes have been caught
and many such notes have been seized.”
Demonetisation announced by the Government is welcomed by many Indians since they viewed it as a panacea for all the ills like black money, terrorism abetted by the fake
currency, etc. There were a lot of Indians believed that there are lakhs of crores of black money and fake currency in the system. In the
initial weeks of demonetisation, a narrative sold by the evangelists of
demonetisation was that black moeny and fake currency (Fake Indian Currency Note – FICN) are so rife
and argued that it is almost 30-40% of the total currency in circulation.
RBI data shows that as on 4/11/2016, the currency in circulation was ₹17.975
Lakh crores. We have later informed in the Parliament that out of this 86%, ie,
₹15.44 Lakh crores are of high denomination notes of ₹500 and ₹1000. So many believed that the quantity of fake currency is anywhere between 4-6 lakh crores!
FICN Estimates
Now let’s
examine the quantity of FICN in the currency in circulation from Government's own database. Minster of State
for Finance disclosed in the Parliament (Lok
Sabha, Unstarred Question No.3285 05.08.2016) that:
“A study on Fake Indian Currency Notes
(FICN) issues, including estimation of FICN in circulation, has been undertaken
by Statistical Institute (ISI), Kolkata under the overall supervision of
National Investigation Agency (NIA). As per the study, the face value of FICN
in circulation was found to be about Rs. 400 crores. It was found the value
remained constant for the last 4 years.”
Yes..the Government's own agencies estimated the quantity of FICN as just ₹400 crores, not even the amount run in to thousand of crores, forget the lakh crores propagated. This ₹400 crores is only 0.02% of the currency in circulation.Though it is a small quantity, FICN is being used for various subversive activities such as espionage, smuggling of arms, drugs and other contraband in India. As per the NIA probe, which has a Terror Funding and Fake Currency Cell, Pakistan is the major supplier of FICN in India.