Gujarat & Delhi account for more than 50% of the Fake Currency seized in the country
Sai Krishna Muthyanolla
November 12, 2019
The
NCRB’s Crime in India report provides data on the Fake currency notes seized by
various law enforcement agencies. As per data of the 2017 report, the value of
fake currency seized across the country has increased by more than 70% in 2017.
Gujarat & Delhi still account for more than 50% of the fake currency seized
in the country.
There seems to be no end to the debate over whether or not fake currency circulation has decreased post-demonetisation. While a definitive answer is difficult, the data from various sources like the RBI & NCRB could give us some insights.
The National Crime Records Bureau (NCRB) compiles data on the number of ‘Fake Indian Currency Notes’ (FICN) seized every year in its annual Crime in India report.
The Crime in India report of 2017, released recently is the first publication of the bureau which covers one full year’s fake currency-related details after the ₹ 500 and ₹ 1000 notes were demonetized in 2016.
The figures presented in 2016 have already been analysed by Factly in an earlier story. This story focusses on the 2017 figures and comparison with 2016 data.
Counterfeiting currency notes is criminalised under
Section 489 of IPC
Counterfeitingcurrency notes is a crime under Section 489 of the Indian
Penal Code. Possession, productionand usage of counterfeit notes can result in severe punishment up to life termimprisonment along with a hefty fine.
Face value of fake notes has increased by 76.4% since
demonetisation
In 2017 alone, fake currency worth ₹ 28.1 crores were seized. In other words, an average of 975 fake notes worth ₹ 7.69 lakhs were confiscated per day in 2017. On the other hand, the value of fake currency seized in 2016 was ₹ 15.9 crores. Thus, the value of fake currency seized in 2017 is 76.4% more than the value of FICN seized in 2016. NCRB included fake currency seizure-related data in its report only since 2016.
₹ 2000, ₹ 1000 & ₹ 500 notes together account
for 95% seized FICN
Fake ₹ 2000 notes with aface value of ₹14.9 crores were seized in 2017, constituting 53% of the FICN seized in 2017.  FICN of ₹ 1000 accountedfor 23% of the total amount or ₹6.57 crores. It has to be noted that ₹ 1000 notes are no longer consideredlegal tender. Fake notes of the old ₹ 500 denomination, worth ₹ 5.14 crores werealso seized in 2017.  All these notestogether were worth ₹26.69 crores and accounted for 95% of the total value of FICN seized in 2017.
Number of fake 2000 notes increased substantially
The maximum numberof counterfeit notes seized in 2017 were that of the old ₹ 500 notes followedby ₹100 notes. However, the number of fake ₹ 500 notes (old& new) came down by 28.6% while number of fake ₹ 100 notesincreased by 55% compared to 2016. There was also a substantial increase in thenumber of fake ₹2000 notes seized in 2017, when close to 75000 such notes were seized. Sincethey were introduced only in November 2016, the real impact of the fake noteswas seen in 2017.
Delhi and Gujarat accounted for maximum number of fake ₹ 1000 & ₹ 2000 notes
In terms of numberof notes, a total of 3,55,994 notes were seized in 2017 of which counterfeitsof old ₹500 notes were more than a lakh. Gujarat accounted for the maximum number offake ₹2000 notes seized. A total of 41% of the fake ₹ 2000 notes were seizedin Gujarat. Delhi accounted for 61% of the fake old ₹ 1000 rupees notesseized.
Gujarat and Delhi account for 53% of the volume &
56% of the total face value of fake notes seized
The maximum numberof fake currency notes were seized in Gujarat. A total of 80,519 notes summingup to ₹9 crores were seized in Gujarat. In Delhi, 1 lakh notes worth ₹ 6.78 crores wereseized. Together, Gujarat and Delhi contribute to 53% of the notes seized and56% of the total value of such notes. In fact, the total value of fake notesseized in these two states in 2017 is almost equal to the total amount seizedin 2016. Even in 2016, the two states together accounted for 54% of the totalFICN seized. No fake notes were seized from Arunachal Pradesh, Jharkhand,Tripura, Meghalaya and Sikkim.
Face value of FCIN seized
in Mizoram has shot up by 17 times
In Gujarat, the amount seized has shot up by 279% while in Delhi, it increased by 20%. Uttar Pradesh where the third highest amount of fake currency was seized in 2017 has seen an increase in seizure by 472% (5.7 times) compared to 2016. Of the top ten states with highest amounts seized, West Bengal and Karnataka have recorded a decrease in the amounts seized by 16.8% and 33% respectively. In Mizoram, the number of fake notes seized, and the amount increased by more than 10 times. Compared to ₹ 3.73 lakh fake notes seized in 2016, the value of fake notes seized in 2017 went up to ₹ 71.13 lakh in the case of Mizoram. Even in Kerala, the value of fake notes seized has increased by 6.5 times.
Discrepancy between data
shared by Government in 2018 & the NCRB data
As per Factly’s article published in 2018 which analysed the data of FICNpresented in Lok Sabha in February 2018, based on NCRB, a total of3,06,808 fake notes were seized across the country after demonetisation(between 09 November 2016 and 31 December 2017). The total amount seized hasbeen reported as ₹21.54 crores while the NCRB report states the same as ₹ 28.1 crores for only 2017. About 39,604 fake notesof 2000 denomination were reported to have been seized during the same periodas per the Lok Sabha answer. But, as per NCRB report of 2017, in 2017 alone, morethan 74,000 fake 2000 notes were seized. In Gujarat itself more than 30,000 suchnotes were seized. There are many such discrepancies between the data presentedin the Lok Sabha and the NCRB report published recently. The time period whichhas been covered in the Lok Sabha answer is more than that covered in the NCRB2017 report. Yet, the total face value of seized notes is lesser. It ispossible that the data presented in the Lok Sabha was provisional, but thegovernment has to explain the discrepancies.
RBI also publishes data on Fake Currency
The Reserve Bank of India also publishes data on fake currency in its annual report. The RBI has issued detailed guidelines for the detectionand impounding of fake notes and the process to be followed by banks and otheragencies.
The data in the NCRB report and the one published by RBI varies because theRBI data pertains to fake notes detected at RBI as well as banks and does not includecounterfeit notes seized by the police and other enforcement agencies. Also,the RBI data pertains to a financial year while the NCRB data pertains to thecalendar year.
According to RBI data, a total of 6.32 lakh counterfeit notes weredetected in financial year 2015-16, 7.62 lakh in 2016-17, 5.22 lakh in 2017-18and 3.17 lakh in 2018-19.