In a surprise announcement, Prime Minister Narendra Modi scrapped the validity of Rs 1000 and 500 notes, and said a new Rs 2000 and 500 note would be introduced. The cost of printing a Rs 1,000 note (Rs.3.17), on the other hand, was only 0.32% of the face value. Knowledge of cost of printing a note now allows us to calculate the cost of implementing the scrapping of Rs 1000 and 500 notes. In 2014-15, the cost of printing the incremental notes of Rs 500 and Rs 1,000 denomination was Rs 2,770 crore. That year, the total stock of Rs 500 notes in circulation increased by Rs 3.59 trillion, while that of Rs 1,000 notes increased by Rs 3.076 trillion.

Source: Hindustan Times November 08, 2016 17:57 UTC