Rs10,861 crore: The printing cost to maintain currency flow

Govt is effectively writing off the cost incurred in printing the old lot, and is incurring an additional cost in printing the new lot of Rs500 and Rs2,000 notes


The ongoing exercise to replace the stock of high-value currency notes will cost the government about Rs11,000 crore in just printing costs. Photo: Indranil Bhoumik/Mint
The ongoing exercise to replace the stock of high-value currency notes will cost the government about Rs11,000 crore in just printing costs. Photo: Indranil Bhoumik/Mint

Opportunity and endurance costs aside, the ongoing exercise to replace the stock of high-value currency denominations will cost the government about Rs11,000 crore in just printing costs. In 2015-16, the two high-value denominations, Rs500 and Rs1,000, made up 24.4% of currency in circulation by volume, but a steep 86.4% by value.

A guesstimate of how much it will cost the government to replace them with new paper can be worked out. In terms of printing, the government is taking a cost hit twice. One, it is effectively writing off the cost it incurred in printing the old lot: Rs5,932 crore. Two, it is incurring an additional cost in printing the new lot: Rs4,929 crore. Or, a total cost of printing of Rs10,861 crore.

Analysis by howindialives.com, a database and search engine for public data.

READ MORE