Money Story

This week, with the RBI coming out with its annual report, the focus is back on demonetisation, which was clearly one of the tasks assigned to the Central government as part of Blue Whale challenge.

The biggest takeaway from the annual report is that the RBI is still around. It is something that was not possible to say in the immediate aftermath of demonetisation.

After demonetisation was announced, the RBI practically vanished from the scene, most probably hoping that the ATM machines would themselves print and dispense new notes. By the time the RBI realised that Artificial Intelligence technology had not made that kind of strides, much damage had been done to both personal economies and the nation’s.

There should be a NASA pic or some such in which the biggest visible human-made structure on the Earth as seen from outer space was the queue in front of ATMs in India during the early days of demonetisation.

Those days of confusion and despair, however, ended when the government stepped in and introduced new rupee notes for the denominations of 500 and 2000 that were most certainly designed at some Student Xerox DTP centre.

The Rs. 500 ‘Mahatma Gandhi New Series’, as they are officially called, basically is the slim-fit variation of the previous one. The Rs. 2000 note, on the other hand, seems part of the Barbie-Goes-To-Bank-in-Pink series.

On the obverse of the Rs. 500 note, you have the mug of Mahatma Gandhi, who, granted, was the Father of the Nation and a great leader and everything, but he surely looks, in this particular picture, sarcastically smiling as if he had been just told that demonetisation will end the menace of black money.

On the reverse of the Rs. 500 note is the pic of Red Fort, the historic Mughal era emperors’ residence well known for having no toilets. I had always felt that emperor Shajahan looked a bit constipated in all his pics featured in history books. Now it figures.

In this context, it is interesting to have a look back at how the rupee notes have evolved over the years: When rupees were first introduced, the RBI printed only 17 Rs. 1000 notes, of which the government retained 5 for itself and introduced the remaining 12 notes for public circulation.

There were no real takers for those early notes because 1) people with around Rs. 500 itself were deemed to be wealthier than the Ambanis and Adanis then. 2) Also, rupees then came printed on A2 sheets. So to carry Rs. 1000 you probably needed a wallet the size of a standard American Tourister suitcase. Pocket pickers had a real tough time in eking out a reasonable life.

Then they started printing rupees in lower denominations and in smaller paper size. But printing technology was at a very rudimentary stage. They never found a way to incorporate the signature of the Finance Minister. That is why those early notes carried only the Finance Minister’s thumb impression.

Much later, the Finance Minister used to physically sign every note after they were printed. This proved to be time-consuming and also back-breaking, leaving the Finance Minister with no time to do his actual work, which is to periodically tell that the economy will start performing better from the next quarter.

So they let the RBI Governor sign the notes, who otherwise had no real work. (His FB job profile even then read: “Works at signing rupee notes”).

How much amount of money the government prints and how is this number arrived at is a question that is always asked. The thing is if the government prints more notes than is needed, it triggers inflation, and if it prints less, it ends up in deflation, so considering all this, the economists in the RBI generally think up some random number and hope to god that it does not lead to inflation or deflation. But going by the state of economy, it seems they haven’t got the number down to pat till date.

Getting back to the present, the government has also introduced, for the first time ever, notes in Rs. 200 denomination. But the new notes aren’t available to us because they haven’t re-calibrated the ATMs. When they get down to recaliberate, I hope they release the RBI Governor Urjit Patel who I believe is stuck inside one of those machines. He had got into it to sign the new notes.

No other reason probably explains why he is not to be seen anywhere else.