To print a Re 1 note, the govt has to spend Rs 1.14: RTI
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Interestingly, Re 1 notes were discontinued over two decades ago for being too costly to manufacture.
"It should be asked if the retrogressive step of re-issuing the costly one rupee notes was taken so that signatures of top bureaucrats of the Union finance ministry may appear on these notes," said Subhash Chandra Agrawal, who had filed the RTI application. Unlike the other currency notes that bear the signature of the RBI governor, the Re 1 notes have the signature of the finance secretary.
In November 1994, the Re 1 notes were discontinued due to high manufacturing costs and to free capacity to print notes of higher denomination. For the same reason, the two and five rupee notes were also scrapped. The RBI decided to discontinue printing notes below Rs 10 after it found that small denomination notes commanded 57% of the total volume of notes in the country and their average life was less than a year. However, Rs 5 bills were reintroduced in 2005 following a shortage of coins.
"For low value notes, the total cost of printing new notes, transporting them across the country, withdrawing old notes and destroying them turns out to be much more than the underlying value of the note in a couple of years. Coins cost several times more but they last for decades," said a central banking source.
The cost of the currency paper accounts for the fattest slice of the money printing expense, said a numismatic expert. The re-introduced Re 1 note is 100% cotton rag weighing 90g per sq metre with a thickness of 110 microns.
Countries like the US control cost by keeping all dollars a uniform size and the moss-green colour. But in India notes are of varied dimensions and hues, mainly to make it easy for the illiterate population to distinguish among notes. The new pink-green Re 1 note will bear the Ashoka Pillar as watermark.
An RBI officer pointed out the machinery and logistics for currency in India is the largest after China. It is probably so because the life of notes in India is shorter than in many other parts of the world. The US Federal Reserve reports the average life of $20 notes as two years, $50 notes as five years and $100 notes as 10 years. In India, the smaller notes have a life of less than a year. A Rs 100 bill stays around for about three-four years. The Rs 500 and Rs 1,000 notes keep going for about five to seven years.
A lot of thought goes into currency designing at the moment. "Even the visually challenged have been brought on board. The varied sizes of the notes and the different shapes on the intaglio help them differentiate between the bills," said the RBI officer.
Yet there have been bloopers, the most recent being the similarity between the Rs 100 and Rs 500 notes, forcing the Rs 500 notes to be re-designed with a distinct yellow tint. The slip-up confirmed the apex bank's worst fears: Indians do not read the denomination on the note, a habit the RBI had inadvertently inculcated among the citizenry with its colour scheme. (PTI - Times of India)
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