What are the Benefits of Plastic Notes in the Indian Economy
To curb the existence of parallel economy and increasing cost of printing of currency in the country the Central Bank of India i.e. The Reserve Bank of India has decided to circulate plastic notes of Rs. 10 denomination in the five cities i.e. Mysore, Kochi, Jaipur, Shimla and Bhubneshwar on trial basis. For this initiative, about one billion plastic notes of Rs. 10 denomination will be printed. It is pertinent to be mentioned that the Reserve Bank changes old torn off notes of value of about two lakh crores every year.
Plastic notes were introduced for the first time in Australia in 1988. The credit of developing plastic currency notes goes to Reserve bank of Australia, Melbourne University and Commonwealth Scientific and Industrial Council. In 1996, after the successful experiment a large number of plastic currency notes were issued throughout the country.
How many countries are printing Plastic notes at present:-
After Australia, plastic notes were introduced in Canada, Brunei, Israel, Fiji, Papua New Guinea, Vietnam, Romania, Mauritius etc. Around thirty countries have adopted plastic notes in the last five years. In India, Reserve bank is working in this direction since 2010.
Image Source:CNN Mone
Benefits of Currency notes:-
1. In the year 2012-13, the Reserve Bank of India spent Rs. 2376 Crore to print currency notes of various denominations which is 1.5% of the total currency.
2. Plastic noted are better in terms of security. The security features used in these notes cannot be copied e.g. transparent window, water mark or numerals which cannot be seen easily.
(currency notes made from paper are faked easily)
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3. Plastic notes are cleaner in comparison to the paper notes.
4. Plastic notes are lighter than the paper currency notes so they can be easily transported from one place to another.
5. Plastic notes last longer so they help in reducing global warming by saving a lot of energy.
6. Paper currency notes used to be dumped or burnt earlier; however, plastic currency notes can be recycled to other useful stuff.
7. Since currency notes pass through number of hands and infected by bacteria which is common in case of paper notes, however in case of plastic notes chances of infection are lesser because bacteria does not stick to them easily.
It is heard that linen cotton based notes are being used in America and “Washi based notes i.e. Yen are used only in Japan. If washed by mistake in pockets of clothes, they are not spoiled and do not tear off easily.
So it can be concluded that if the printing of plastic currency notes fulfilled all the desired goals, then the economy will have very good results in the future.