It’s Raining Pink Money: From temple donations to mangoes, how Indians are getting rid of Rs 2000 notes

The Rs 2000 note has got many Indians fretting. Since the Reserve Bank of India (RBI) announced the withdrawal of the high-value currency, confusion and panic have prevailed. Several reassurances from the central bank have not helped. Few want to stand in long bank queues to exchange or deposit notes and are finding ways to offload them. They are buying everything from gold to mangoes.

The withdrawal of the Rs 2000 note has brought back memories of November 2016, when Prime Minister Narendra Modi made a sudden demonetisation announcement. While the Rs 2000 notes will continue to be legal tender even after the 30 September deadline to deposit them, Indians seem to be in a rush to spend the money.

People are thronging shops and petrol pumps, using the Rs 2000 notes to buy luxury goods and more. Much of this could be unaccounted money and those who have a huge stash don’t want to go to the banks, fearing the tax department.

Also read: Are Rs 2000 notes being withdrawn because of black money? What happens after 30 September?

Mangoes and luxury watches

Many are desperate and going on a shopping spree, getting their hands on everything and anything they can. It is mango season and some have decided to splurge on the expensive fruit.

“A lot of people are using 2,000-rupee notes to pay for mangoes since Saturday,” Mohammad Azhar, 30, a mango seller near Mumbai’s Crawford Market area told Reuters.

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He said that he has been getting at least eight to 10 notes every day. “I accept it. I have no option, it’s my business. I will deposit everything at once before 30 September. There is no fear since the note is valid.”

The number of cash payments has gone up in the last couple of days. Food delivery firm Zomato said on its Twitter account on Monday that 72 per cent of the “cash on delivery” orders were paid in 2,000-rupee notes since Friday.

Even shopkeepers are making the most of the rush. A meat shop in Delhi put up a poster with a tempting offer: Give Rs 2000 and get goods worth Rs 2100.

If you think RBI is smart, think again cos Delhites are much smarter.

What an innovative way to increase your sales! 😅#2000Note pic.twitter.com/ALb2FNDJi0

— Sumit Agarwal 🇮🇳 (@sumitagarwal_IN) May 22, 2023

But there are that many mangoes and that much food you can buy. For those who have lakhs and lakhs in the Rs 2000 denomination, spending on luxury goods seems like a viable choice.

“I don’t want to stand in the bank queue and I have many notes to get rid of. Buying a Rolex seems like a good investment,” said a businesswoman from Mumbai, who didn’t want to be named.

An outlet of luxury watch Rado in a mall in central Mumbai has seen a 60 to 70 per cent increase in 2000-rupee notes since Friday’s announcement. Michael Martis, store manager at the store, told Reuters, “That has increased our watch sales to 3-4 pieces per day from three to four pieces a day.”

Temple donations

Not knowing how and where to spend, some have turned to god. Temple donations have seen a jump in several cities and towns as people are hurrying to disburden the Rs 2000 notes.

The temple administration of Maa Jwala Devi temple in Himachal Pradesh’s Kangra district found 400 notes of the Rs 2000 denomination deposited in the donation box installed on its premises. The money, which amounts to Rs 8 lakh, will be used for developing temple facilities, according to reports.

Suresh Kumar, the temple’s junior engineer, told India Today that several devotees visit the temple and often make such offerings.

Gold rush

Gold is the obvious choice for those with more unaccounted money. Some are reportedly panic buying.

In Mumbai’s Zaveri Bazaar, the gold market, some jewellers were reportedly charging a premium for the purchase of the precious metal for accepting the Rs 2000 notes. A day after the RBI announcement, on Saturday, gold was sold in the unofficial market for around Rs 67,000 (per 10 grammes) when paid for with ₹2,000 notes, compared with the official rate of ₹63,800 (including GST). In the Ahmedabad grey market, the gold when bought with Rs 2,000 notes hit ₹70,000 (per 10 grammes), according to a report in The Economic Times.

Also read: India scraps the Rs 2000 note: Will this affect the economy?

However, this practice only exists in the unorganised sector. “There have been a lot of inquiries about purchasing gold or silver with Rs 2,000 notes, hence the higher footfalls on Saturday. However, due to strict KYC norms actual purchase has been less,” Saiyam Mehra, the chairman of All India Gem And Jewellery Domestic Council told news agency PTI.

Jewellers in Delhi’s Chandni Chowk said that their demand for a premium from customers was rejected.

Surendra Mehta, national secretary of the India Bullion & Jewellers Association, told moneycontrol, “If somebody is buying gold using these notes, there should not be any issue. There are no jewellers who are charging a premium while accepting Rs 2,000 notes. It is business as usual. All premium-related news are rumours – there is no truth to it.”

Buying gold in cash for an amount exceeding Rs 2 lakh in a single day is a violation of the income tax law. The receiver of the cash in such a transaction would become liable to pay a penalty of the amount transacted in cash as per Section 271D of the Income Tax Act, reports ET.

Property

Those trying to offload a large number of notes could consider purchasing land on the outskirts of small towns or buying residential stock from the secondary real estate market.

“One may witness a spurt in land deals going forward in upcoming locations and even in ready-to-move-in inventory held by builders. Also, the impact would be more in the secondary market rather than the primary market,” said a real estate expert told moneycontrol.
Petrol

Petrol pumps across India are seeing a surge in customers, lining up with Rs 2000 notes. Many are buying fuel worth Rs 100 to Rs 200 and paying with high-value notes.

According to the All India Petroleum Dealers Association, from just 10 per cent before the RBI’s Friday announcement, the share of Rs 2,000 notes in cash transactions at petrol pumps has gone up to 90 per cent. Digital payments, which made up 40 per cent of fuel pumps’ total sales, have reduced to 10 per cent, reports The Indian Express.

“The majority of the customers are trying to use Rs 2,000 notes even for small purchases of Rs 100-200 and are expecting change from the petrol pumps and hence the petrol outlets are extremely short of change across the country,” the association said in a statement.

With inputs from agencies

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