In reply to a question raised in the Lok Sabha, the Union Minister of State for Home Affairs Hansraj Ahir informed the House that counterfeit currency to the tune of ₹21.54 crore was seized by agencies after demonetisation.
He said that information received from security and intelligence agencies indicated that Pakistan is involved in manufacturing and smuggling of fake currency into India. However, no documentary evidence of counterfeit notes of Pakistani origin being seized since demonetisation has been recorded.
On November 8, 2016, the government announced that ₹500 and ₹1000 notes would no longer be legal tender. The government claimed that the move would diminish the size of the shadow economy by rooting out black money and counterfeit currency used for funding illicit activities including terrorism.
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The Minister said that Fake Indian Currency Notes (FICN) seized by the police in States and Union Territories include the recently introduced ₹2000, ₹500, and ₹200 currency notes. A total of 39,604 currency notes of ₹2000 denomination was seized across the country. The ₹2000 note has been in circulation since November 10, 2016 and is part of the newly designed Mahatma Gandhi New Series of banknotes which have enhanced security features.
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New Delhi accounted for the most illicit currency by value, with authorities netting ₹6.96 crore, while ₹5.34 crore and ₹1.41 crore was seized in Gujarat and Uttar Pradesh respectively. Fake currency amounting to ₹1.27 crore was seized in Mizoram. No counterfeit currency was seized from other north-eastern States such as Sikkim, Nagaland, and Meghalaya.
By value, currency notes of ₹500 denomination formed a quarter of the total illicit currency seized. ₹7.92 crore in counterfeit ₹2000 was seized.
The aggregate value of fake currency seized has increased since 2013. By collating the data issued by the government in response to two questions previously raised in Parliament on May 3, 2016, and July 25, 2017, it can be observed that the total value of fake currency seized has gone up post-demonetisation.
The data pertains to illicit currency notes that were seized by the police in States and Union Territories across the country. A large chunk of the fake notes in circulation is recovered by the different branches of the Reserve Bank of India (RBI).