Bonds, Currencies & Commodities
Falling rupee and its counterfeit cousin!

While the rupee is touching new bottoms every day against the US dollar, the number of fake currency notes in India is increasing. Even the Security Press is printing blank notes. Can the new governor of RBI look at polymer currency notes?

Dr Raghuram G Rajan, Officer on Special Duty (OSD) at the Reserve Bank of India (RBI) Head Quarters in Mumbai, who would take over as the next governor on 5th September, has his plate full of woes.
Since his return to India, some two years ago, after a glorious innings in the US, and being an advisor to the Prime Minister, he is fully aware of what is happening in the country and perhaps has been drawing up plans on what needs to be done.
In the meantime, the current account deficit (CAD) kept growing and the Indian rupee kept declining in its value.  No doubt, both speculators and panic mongers have caused this damage, and the rupee, battered and bruised, may touch the danger mark of 70 against the US dollar, before some radical changes are made.
However, the rupee is one of the many in Dr Rajan's full plate that needs to be tackled with care, and nurtured back to a healthy lifestyle. The intrinsic value (of rupee vs US dollar) is certainly in the 55 to 60 range, and not in the 70s.
As though the slide in its value is not enough to hurt its reputation, the rupee has a fake cousin that has been running around loose, harming the Indian economy. Cross-border terrorism from Pakistan, via Nepal and Bangladesh continues unabated, and the porous borders needs to be tightened by a totally independent force, as carriers or infiltrators seem to be able to cross with impunity, or with connivance!
The latest Reserve Bank report, annual at that, admits that a staggering 98,459 counterfeit notes of Rs1,000 denomination were detected, as against 83,280 last year.  Since counterfeit notes have been detected in Rs500 denomination also, all banks use note sorting machine to sort out the fakes from the real.  The customers, who do come across the fakes, unwittingly, are not penalized, but the banks have been advised to impound these notes so that it does not return to circulation.
We may digress for a moment to recall that, not long ago, just three weeks ago, RBI itself received a total of Rs970 crore of blank currency notes from the secured vaults of its own press. Efforts by media to investigate this lapse further did not yield any result, except to know that these printing presses do not have adequate safes to keep the stock.  Apparently, a few million here or there won't make a difference! There has been no further info on this unfortunate lapse.
But what is the urgency in raising this issue of counterfeit currency now?
At Moneylife, we have raised this issue of counterfeit currency notes from time to time.  We have detailed how a number of countries have switched over to polymer currency notes, instead of paper. Paper currency notes have a shorter lifespan, are relatively easy enough to fake, cannot be detected by layman, and can cause huge inflation, besides being an instrument to aid terrorism and can, on the whole disrupt the growing economy.
To counter this, RBI, in fact, did a market testing of polymer currency notes in some two-tier cities, but the full details have not yet been made public.  There is no further news as to when they, if at all, plan to introduce the same in our country?
In the meantime, after a great amount of opposition, the Food Security Bill has gone through; efforts are now being made to streamline and overcome power generation obstacles; an enormous increase to the price of gas have been accepted.  These are all signs to indicate an imminent announcement for general elections.  Unless we have a major military problem in the borders, it is likely that such an announcement is likely before the year is out.
We need a clear-cut announcement from the RBI, and that too from the new governor, as a part of his policy statement, as to when polymer currency notes are planned to be introduced in the country?

(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce. He was also associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US.)


RTI battle of Jawhar tribals get a fillip with a favourable CIC order

Subsequent to Moneylife’s report, the State Chief Information Commissioner from Maharashtra ordered that the 1,272 RTI applicants - all tribals from Jawhar taluka of Thane district be provided complete information about their claims to the forest land

Political leaders are working towards weakening the Right to Information (RTI) Act by perching political parties outside the RTI net and may come out triumphant on 29th August. However, at the same time, 1,272 tribal from Jawhar taluka of Thane district have strengthened their position by using the RTI Act in their fight for rightful forestland titles and are now singing a triumphant note.


It was a historic day for the RTI movement when on 27th August, 10 tribals, representing the 1,272 RTI applicants from several villages from Jawhar taluka, appeared for a hearing at the Maharashtra State Chief Information Commission (SCIC)’s office near Mantralaya in Mumbai. SCIC Ratnakar Gaikwad, who had called this hearing after receiving second appeal from the tribals, ruled in their favour.


Gaikwad has ordered a compensation of Rs2,000 to be paid to the 10 tribals who were made to unnecessarily file appeals. The SCIC also issued a show cause notice to the Public Information Officer (PIO) with penalty proceedings. The PIO has been asked to provide the required information in the format sought by the tribals before 31st October. Besides, Gaikwad had directed the revenue secretary to suo moto display information about claims under Forest Rights Act (FRA) for all applications received after 1 April 2011, on notice boards and on the website that would be updated every month.


Just to recall, RTI applications were filed in mass, on 6 September 2012 by the tribal villagers from Jawhar taluka, under the guidance of young local activist Milind Thatte. The information sought was regarding their claims for land ownership under the Forest Right Act (DRA). Their land right had been approved by their respective Gram Sabhas after scrutiny of several government committees. However, the same was being denied or given partially to the tribals by the district collectorate, on vague grounds.


When the 1,272 RTI applicants did not received information from the PIO within the stipulated 30 days, 450 applicants out of these, filed a first appeal on 16 May 2013. On 25 June 2013, the First Appellate Authority (FAA) directed the PIO to give the requisite information, but the latter did not pay heed. Hence, the tribals were forced to knock at the CIC door.


When Moneylife contacted Thatte in April, he had said, “The Forest Rights Act implementation began in January 2008 across Maharashtra. Village forest rights committees (FRCs) were formed and tribal villagers filed their claims before these committees set up at different levels by the government. The committees verified these claims through spot visits and measurements. Later, the Gram Sabhas either approved or rejected these claims. The claims were then forwarded to Sub-Divisional Level Committee (SDLC) and then to District Level Committee (DLC) presided by the district collectors. The SDLC and DLC were expected to clear the claims within 60 days each. However, the tribal claimants have received their Patta (land title) only after five long years and they have been given only part of their (land) claim. This shocked the villagers as no reason was assigned as to why less land had been given to them despite clearance by committees.”


Thatte then trained the tribals in filing RTI and 700 of them filed it in a single day at the Additional Collector’s officer. More followed and the final number of applicants were 1,272.


The RTI applications demanded - 

1) Copy of letter, if any, sent to the Gram Sabha for verification of my claim for my land as per Section 12 A

2) Copy of recommendation made by the Forest Rights Committee or Sub-Divisional level committee to reduce the area of my claim for my land as per Section 12 A

3) Copy of the letter as per Section 12 A (7) letter of rejection or of only partial allotment of land sent to the Gram Sabha and Copy of the letter sent to me stating the reason for rejection or only partial allotment of my claims to my land.


Shailesh Gandhi, former central information commissioner and RTI activist, who is guiding Thatte, said, “Although PIO was asked to provide information, the appellate officer conducted hearings that became a harassing ordeal for the appellants. I attended some the first appellate hearings in Jawhar and realized that the PIO and FAA were playing tricks to deny the information to these tribals. It appeared there were no reasons for not accepting the Gram Sabha recommendations and asked them to file a second appeal. The PIO and FAA were refusing to give this information in writing that there were no reasons on records for the arbitrary actions.’’


For the CIC hearing, 10 village assemblies resolved to send one representative each to the SCIC office on 27th August. Villagers donated money to cover the travel expenses. The tribal RTI applicants asked for information in the following format:



Name of FRA claimant

Evidences verified by Gram Sabha

Land area approved by Gram Sabha

Evidences verified by SDLC

Land area approved by SDLC

If land area approved is lesser than that by Gram Sabha, reasons for partial rejection

Date of letter sent to claimant explaining the reasons for partial rejection


















Gandhi said, “During the hearing we made a strong plea to make this information available suo moto for all FRA claimants in Maharashtra, so that all tribals do not have to go through this trauma. This was a case of dishonest denial of information and there was no reasonable cause for denial of information. SCIC Gaikwad, took note of the complete denial of information and accepted our plea by ordering disclosure of information to all 1,272 RTI applicants, besides ensuring Section 4 suo motu disclosure of such information all over Maharashtra.’’


Here is the order issued by the SCIC..


The courageous citizens of Jawhar taluka will have to wait until 31st October to see whether the PIO provides the information. In any case, it will not be easy now for the district government to suppress the truth.


For more information call Milind Thatte at 9421564330  or write to: [email protected]  


You may also want to read…

Over 700 tribal villagers from Thane district file RTIs for their rights

Vinita Deshmukh is the consulting editor of Moneylife, an RTI activist and convener of the Pune Metro Jagruti Abhiyaan. She is the recipient of prestigious awards like the Statesman Award for Rural Reporting which she won twice in 1998 and 2005 and the Chameli Devi Jain award for outstanding media person for her investigation series on Dow Chemicals. She co-authored the book “To The Last Bullet - The Inspiring Story of A Braveheart - Ashok Kamte” with Vinita Kamte and is the author of “The Mighty Fall”.)



Shashibhushan Gokhale

4 years ago

Rule of law exists when it actually delivers justice to the most uneducated person. Decisions like this go a long way in strengthening democracy and belief of people in democratic ways. We need such decisions that implement existing laws and the patience of people with right guidance to tackle naxalism.

Thanks to Shri. Ratnakar Gaikwad, Shri. Shailesh Gandhi and Shri. Milind Thatte for giving a reason to rejoice in India's democracy and congratulations to all the deserving land beneficiaries.

shailesh kulkarni

4 years ago

I hope the people get what they truly deserve. Called up Milind and conveyed my best wishes to him for the noble work.

nagesh kini

4 years ago

As one who has visited Jawahar and stayed there, I say that the living conditions of the tribals is absolutely horrific, children malnourished, medical and educational facilities virtually absent, no sanitation or drinking water worth the name. It is unthinkable that all this in the suburbs of Mumbai aka Urbis Primus Indes!
Rather than merel allowing the RTI application, the State SIC ought to have ordered immediate restoration of all their legitimate rights ab initio. Giving the authorities another one month may be legally right but certainly not ethically correct.
Each official who has been stalling the response should be heavily penalized personally. This is the penalty they should be called upon to pay for harassing hapless defenseless tribals for asserting their legitimate rights.

Sensex, Nifty pulled down by Food Security Bill: Tuesday closing report

Nifty may try to stabilise around 5240 but the trend is firmly down

The passage of Food Security Bill in the Lok Sabha on Monday night raised concerns about the effect of massive subsidy on the fiscal deficit. As a result, the rupee on Tuesday collapsed to an all-time low and domestic indices fell heavily again. Today’s fall broke the trend of past three consecutive days of gains. The Nifty wiped off all the profits of the past three trading sessions.


On Tuesday, the Indian indices opened in the negative and hit their intra-day highs at the same levels but started falling thereafter. The indices hit a three-day (including today) low and closed almost at the same level. The Sensex opened at 18,461, and touched an intra-day low of 17,922 before closing in the negative at 17,968 (down 590 points or 3.18%). The Nifty opened at 5,427, hit an intra-day low of 5,274 and closed in the negative at 5,287 (down 189 points or 3.45%). The National Stock Exchange (NSE) recorded a volume of 66.04 crore shares which was lower than the average of the last 10 days.


Except for IT (up 0.22%), all other indices closed in the negative. The top five losers were Finance (6.16%); Bank Nifty (5.37%); Infra (4.73%); Realty (4.28%) and PSE (4.18%).


Of the 50 stocks on the Nifty, three ended in the green. Top gainers were Infosys (1.03%); Dr Reddy (0.98%) and HCL Technologies (0.05%). Top losers were IDFC (16.15%); BHEL (10.65%); IndusInd Bank (8.69%); Jaiprakash Associates (8.68%) and HDFC Bank (7.44%).


The rupee fell to a record low of 66.075 against the US dollar. Finance minister P Chidambaram on Tuesday said the currency is undervalued and hoped it will find its appropriate level. Chidambaram further said the fiscal deficit would be contained at 4.8% of the GDP even after considering subsidies for the implementation of the Food Security Bill.


India is considering currency swaps with other countries, TV channels reported on Tuesday, citing senior government officials.


Indian gold futures, which hit a record high on Tuesday, and is set to touch the keenly watched Rs33,000 per 10 grams mark this week with the continuing weakness in the rupee.


Read about the basics of Food Security Bill here


The bill still needs to be passed by the upper house, the Rajya Sabha, to become law. In the remaining days of the monsoon session, the government will try to pass a bill to allow foreign investment in the pension sector during the extended session, a law seen as a first step to building a viable private pension industry in India. Also up for debate is a bill setting rules for compensation for land acquired for infrastructure projects and industry, a move seen as raising costs but potentially reducing protests that have plagued India's industrialization drive.


Based on the current assessment of prevailing and evolving market conditions, the Reserve Bank has decided to conduct Open Market Operations (OMOs) by purchasing the government securities for an aggregate amount of Rs8,000 crore on 30 August 2013 through multi-security auction using the multiple price method.


Meanwhile, India's cabinet has approved infrastructure projects worth Rs1.83 lakh crore, the finance minister said, as part of a government drive to fast-track clearances and win back investor confidence. A cabinet panel cleared 18 power projects at a cost of Rs83,000 crore, he added. The Cabinet Committee on Investment has asked for an immediate resolution of issues hurting the progress of other infrastructure projects within the next two months.


Except for Shanghai Composite, which rose, 0.34%, all the other Asian indices closed in the negative. Jakarta Composite fell the most, 3.71%.


China's industrial-profit growth rebounded in July, adding to signs that the economy is stabilizing after a two-quarter slowdown and an interbank lending squeeze in June. Net income rose 12% from a year earlier after gaining 6.3% in June, the statistics bureau said in Beijing today.


US Secretary of State John Kerry said the US President will hold Syria's government accountable for using chemical weapons against Syrian civilians.


US indices ended in the negative. Among the US economic data, the Commerce Department reported new orders for durable manufactured goods plunged 7.3% in July, much sharper than the 5% drop expected.


European indices and US Futures were trading sharply lower.


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