Former Reserve Bank of India (RBI) governor Raghuram Rajan had recommended introduction of Rs 5,000 and Rs 10,000 notes, the Public Accounts Committee (PAC) was told.
According to a Times of India report, Rajan, whose tenure ended in early-September last year, had made this suggestion keeping in mind the inflation and the need for facilitating payments and managing the currency logistics.
As per the information, which was provided by the RBI to the PAC, Rajan had made the recommendation in October 2014, months after the Narendra Modi government took charge.
The government, however, didn’t accept suggestion of Rajan but settled with the introduction of Rs 2,000 notes on May 18, 2016.
Decision to introduce a new series of Rs 2,000 notes and the printing presses were finally given instructions in June last year, the report said.
The disclosure made by the PAC throws light on the sequence of events and discussions between the RBI and the government ahead of November 8 demonetisation decision.
Finance Minister Arun Jaitley has said that the government did not accept the recommendation for Rs 5,000 and Rs 10,000 notes as it wanted replacement currency available immediately, and so went for Rs 2,000 notes.
The new Rs 2,000 notes were pumped into economy only after the decision to ban Rs 500 and Rs 1,000 was announced.