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Business News/ Politics / Policy/  Narendra Modi pitches ‘Make In India’ for currency notes
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Narendra Modi pitches ‘Make In India’ for currency notes

India's currency should use paper and ink made in the country, Prime Minister Modi says

Prime minister Narendra Modi speaks during RBI’s conference on financial inclusion in Mumbai on Thursday. Photo: Abhijit Bhatlekar/MintPremium
Prime minister Narendra Modi speaks during RBI’s conference on financial inclusion in Mumbai on Thursday. Photo: Abhijit Bhatlekar/Mint

Mumbai: India’s currency notes should use paper and ink made in the country, Prime Minister Narendra Modi exhorted on Thursday.

“Why should Mahatma Gandhi, who fought to promote swadeshi products, have his picture on currency notes with imported paper and ink?" Modi asked rhetorically at the 80th anniversary celebration of the Reserve Bank of India (RBI).

The prime minister’s remarks were in the context of the government’s Make in India campaign, an initiative to boost local manufacturing and skill development.

“Doesn’t my country have enough manufacturers? They should be compelled to bring all the world’s technology to ensure that the paper in our currency is Indian," Modi said. “I want the RBI to take it up as its responsibility and take leadership. This is where Make in India starts."

The central bank, which prints money and mints coins, imports much of the raw material used in the production of currency notes from Japan and Australia. A major concern with importing currency paper is that the RBI cannot demand customized specifications without having to pay a significant premium.

Manufacturing paper and ink locally is expected to reduce the cost of production of currency notes.

The RBI on its part has been trying to localize production of currency notes. Deputy governor S.S. Mundra said on Thursday that the RBI has started work to set up a factory to produce currency paper in India.

“We are now in advanced stages of the formation of such a factory and in the next few months we should be producing our own paper for our currency," Mundra said.

An expert said the manufacture of currency notes is of little importance compared with its value.

“The only issue that comes to mind is that you need specific technology in manufacturing paper to tackle counterfeiting. However, this is an irrelevant issue," said A.V. Rajwade, a Mint columnist and director of AV Rajwade and Co. Pvt. Ltd, a foreign exchange and interest risk management firm. “How does it make a difference if you import the paper or produce it here? The more pertinent problem is that the exchange rate is overvalued and that is hurting the economy."

In October, The Times Of India reported that an RBI panel comprising officials from the central bank and the finance ministry was looking at the best way to set up a factory to produce paper for currency printing. The proposed facility was to be an equal joint venture between Security Printing and Minting Corp. of India Ltd and RBI subsidiary Bharatiya Reserve Bank Note Mudran Pvt. Ltd, the newspaper reported.

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Published: 02 Apr 2015, 12:40 PM IST
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