Page 80 - Veritas - 02.03.22

being replaced with new ones. Demonetization is often used as a tool

in modernizing a cash-dependent developing economy and to eradicate

corruption and crime (counterfeiting and tax evasion). In 2016, the

Indian government decided to demonetize the 500 and 1000 rupee notes,

the two biggest denominations in its currency system; these notes were

almost 86% of the country’s circulating cash.

The government’s goal (and rationale for the abrupt announcement)

is to combat India’s underground economy on several fronts: eradicate

counterfeit currency, fight tax evasion (only 1% of the population pays

taxes), eliminate black money gained through money laundering, and

terrorist financing activities, and to promote a cashless economy.

Comparison study of security in 500 rupee denomination :

The various security features are:

1. Security Thread-

The security thread is a plain, non-readable fully embedded continuous

line. All the currency notes possess a security thread. When notes are

held against the light, the security thread present on Rs.2000, Rs.500

and Rs.100 can be seen.

Comparison :

Old 500 rupee note - The security thread appears to the right of the Ma-

hatma’s portrait.

New 500 rupee note - The security thread appears to the left of the Ma-

hatma’s portrait.

2. Watermark-

The Mahatma Gandhi Series of banknotes contain the Mahatma Gand-

hi watermark, with a light and shade effect and multi-directional lines

in the watermark window.

Comparison: