While special paper for printing currency notes may be produced in India soon, how about introducing polymer currency notes, which are not easily counterfeited?

In 2010, the foundation stone was laid in Mysore by Security Printing and Minting Corporation of India Ltd, (SPMCIL) to make special paper for printing currency notes indigenously. This is a joint venture between Bharatiya Reserve Bank Note Mudran Pvt Ltd, which is a unit of Reserve Bank of India (RBI) subsidiary, and SPMCIL. Why should this organisation be a "private limited" company? It is still not clear! Anyway, this facility is likely to become operational by the end of this year, once power supply is made available, and all other essential equipment is in place.

In the past, this speciality paper designed for printing currency notes was being imported from Japan and Australia. Full details of the quantity that will be made in this plant and whether this will be a total import substitution effort has not been made public.

However, it is most likely that even after the initial trials are successful and printed currency is "market tested", it would be months, may be even a couple of years more before we can think of import substitution. This will definitely reduce our imports to some extent, as the bill for this alone is estimated to be around Rs1,200 crore to Rs1,600 crore per year.

The question of counterfeit fake Indian currency notes in circulation has been a growing menace and a threat to our economy, adding to our woes in inflation. Also, from time to time, crores of fake notes, in higher denominations like Rs500 and Rs1,000 notes have been smuggled across the Indo-Pak border.

It is high time, India planned for a switch over to polymer currency notes, which has been successfully introduced in more than 25 countries. Australia, the pioneer, has been using this for almost 30 years now!

In fact, officials of the Reserve Bank of India, like the retired Deputy Governor, Dr KC Chakrabarty, have stated that trials were being conducted in selected towns like Bhubaneshwar, Kochi, Jaipur, Mysore and Shimla with smaller denomination like Rs10.

These press reports appeared as early as May 2013. There has been complete silence after this and fake currencies continue to be seized on a regular basis by vigilant security forces. Both the Finance Ministry and the RBI have not made any clear-cut statement on this issue.

Prime Minister Narendra Modi has been talking about unearthing "black money" from overseas sources. But, what about the black money, running into crores, that is stashed inside the country itself, in the form of currency notes? Only a planned introduction of high denomination polymer currency notes and demonetizing the old notes would help to resolve this problem. Polymer currency notes are not easily counterfeited and next year, United Kingdom also plans to go in for the same! What are we waiting for?

(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.)