160-million currency notes of ₹1 issued in last two years

The Finance Ministry has issued as many as 160 million currency notes of one rupee denomination in the last two years, nearly two decades after they were taken off print, according to queries made under the RTI Act.

Delhi-based RTI activist Subhash Chandra Agrawal and Mumbai-based RTI activist Manoranjay Roy had, in separate RTI queries, sought the number of one rupee currency notes issued by the government in the last 20 years.

“In 1994-95, a total 40 million currency notes of one rupee denomination were issued. Thereafter, there was no issuance of one rupee notes from fiscal year 1995-96 till fiscal year 2013-14,” the reply furnished by Deputy Manager (HR) and Public Information Officer of Currency Note Press, G Krishna Mohan, said.

However, in 2014-15, a total five million notes and in the current fiscal year, a total of 155 million notes of one rupee denomination, were again introduced in the market, the reply said. It further said that in 1994-95, the production cost of 40 million currency notes of one rupee denomination was ₹59,40,059, implying that the production cost stood at ₹1.48 a note.

Agrawal claimed, “I possess the file notings and the correspondence which indicate that the process of reissuing new one rupee notes at a high printing cost was a bureaucratic exercise carried out by the Manmohan Singh-led UPA government, and it was done despite stiff resistance from the Reserve Bank of India.”

“Besides, one rupee note is being sold openly through Web sites at a premium price of ₹50, which the apex bank needs to put a check on,” he said.

Questioning the move to reissue the notes, Roy said, “Considering the high printing cost of a one rupee note, and its very short life, this decision was absolutely avoidable.”

Abhay Pethe, a professor in the Economics department of Mumbai University, said there was no need for the RBI to print more one rupee notes unless it was mandated by the government.

“It doesn’t have anything to do with the numismatic value also. The issuance of one rupee notes is not going to increase their circulation either,” he said.

Explaining the nuances, RBI spokesperson Alpana Killawala said, “The one rupee note is actually a coin. And unlike the notes, which are a liability of the RBI, coins are a liability of the Government of India. Hence, the decision to reissue one rupee notes was taken by the Finance Ministry.”

She added, “Selling of one rupee notes at high premium is a mutual bartering act between two or more individuals and it does not amount to criminality.”

“The present stock of one rupee notes should be sold only as souvenir in attractive plastic packing at a premium price, just as the silver-alloy commemorative coins are sold in plastic packing, rather than putting them (one rupee notes) into circulation in the market,” Agrawal said.

The limited number of one rupee notes would not stay in circulation anyway, as anyone getting them is likely to keep it as a collector’s item, he said.

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