Recent news said much of the notes in circulation in 500/1000 denomination (estimated value about Rs 15 lakh crore) have already come back into the banking system. Whether this news is based on true facts or not is not yet clear, but it does give an impression that the “Great Indian Jugaad” worked its way through wrong ways to convert hoarded black money into new notes. At least, the Income Tax raids in various parts of the country nabbing people with unexplained amounts of new notes is showing that there has been some mischief-makers who have negated the objectives of demonetization itself.
To counter such mischief-makers, the government may propose to introduce a new series of currency notes which have an innovative melting-technology paper. Developed by leading scientists of the National Science Research Mission (NSRM), this technology acts to “melt” the paper in the notes after 6 months of printing and issue. That means if a new note was printed and issued out on January 1, the note will melt after June 30, which is its expiry date.
The advantage is that the hoarding of cash for long periods will now be automatically useless. People will be forced to deposit their notes in the bank if they want to preserve its value. The black money hoarders, who played mischief now, will not see any sense in hoarding since all they will hold after 6 months is melted paper wax, which has zero value. This is the only way to counter hoarding by such mischief makers, the government feels.
To preserve its value, all that people have to do is, to deposit the note into their bank accounts before the expiry date. In any case, the central bank will replace notes that come into the banking system and are already more than 5 months old, to reduce the need for people to deposit it before expiry anyway. For those notes that are nearing expiry and still in your hand, you just need to walk into the nearest bank branch and deposit it. Banks will even offer services to collect the notes from your home or office if you SMS them.