Here is a pdf of the trends in currency usage in India from 1970-2016.
- In 2000-01, Rs 1000 were reintroduced after being banned in 1978. In 2000-01 its share in total notes volume was just 1.7% which has jumped to 38% by 2015-16. Just to compare, in 1970-71 Rs 1000 share was 1% which declined to 0.6% in 1978.
- Rs 500 notes started in 1987-88 comprised just 0.5% of the share and is now at 47.2%. Together, Rs 500 and Rs 1000 form 85.2% of currency share. This has been knocked off in one day. The total volume of notes to be replaced is around Rs 15 lakh crore (Rs 7.85 lakh crore of Rs 500 plus Rs 6.32 lakh crore of Rs 500)!
- Rs 100 notes share has declined from 48% in 1970 to just 10% in 2015-16. This does not mean is usage has declined whuch has increased manifold from Rs 0.2 lakh crore to 1.6 lakh crore! It is just that its share in volumes has slipped due to the bigger notes.
- Likewise share of Rs 10 has shrunk from 34% to 2%.
- Rs 20 notes were started in 1972-73 with a share of 2.7%. It rose to 8% in 1982 and then declined gradually to 0.6% in 2015.
All in all a shocking rise in usage of Rs 500 and Rs 1000 notes over the years. Due to huge inflation over the years, they have replaced the Rs 50 and Rs 100 as top high end notes.
As said earlier, the government and central bank should have seen these trends earlier. The share of these two notes was 26% in 2000-01 and had risen three times to 81% by 2011 itself. Since then it has actually plateaued. The writing was on the wall for a while till they decided to tear the wall completely and build a new one…