Where more than 70 per cent of country’s population struggles to earn $2 a day, we have more than 3,500 million pieces of 500 rupees notes and more than 1,000 million of 1000 rupees currencies floating in the economy as of now! A report by the Reserve Bank of India stated that out of the total currency in circulation in March 2010, 500 and 1,000 notes constituted 76.5 per cent (increased from 69.5 per cent in a year’s time). And it is not just about the number of higher denomination notes floating in the market but more about the very transaction of the same.
…Higher denominations attract higher amount of fake currencies which are being pumped into the economy. The financial channels of India have recorded a massive 400 per cent increase in counterfeit transactions, according to a report by Financial Intelligence Unit (FIU) under the Union Finance Ministry compiled for 2010-11. FIU further revealed that majority of these fake currencies is in 500 rupee denominations consisting of 60.74 per cent of the total amount. The number of fake 1,000 rupee notes is also rising rapidly. In June 2011, Directorate of Revenue Intelligence seized fake currency (with a face value) of Rs.1.54 crore in which the counterfeit currency was in the denomination of Rs.500. As per a white paper prepared Research and Analysis Wing and the Central Bureau of Investigation, very shockingly, one in every four 1000 rupees notes is fake.
Detailed news link: here