Better Bang for the Rupee

Context: A review of innovations to realise the true potential of the Indian currency notes in circulation.

Background

• Changes in anvil: 160 years since paper currency introduced in 1861, digital payments are a gaining currency, and a central bank digital currency is around the corner.
• Paper currency still relevant: Notes in circulation soon to cross Rs.30 trillion and approach double pre-demonetisation level.
• Wider acceptability: Physical currency is recognised by the poor and rich in villages and metros.
• According to the 2020 International Association of Currency Affairs Award, Indian paper currency lags in capturing the country’s ethos, aspirations, and rich cultural heritage.

A review of potential innovations

• Incorporate strong security features: E.g. hologram doorways, fluorescent images, perforated digits, rolling colour patches, shifting and reversing digits, and enhanced print quality, etc.
• Improve recognisability: Including accessibility to visually challenged, increasing the public confidence.
• Enhance functionality: Rework guarantee clause in currency, which has long outlived its utility.
  • Represent convertibility to fiat currency model: the US dollar declares ‘this note is legal tender for all debts, public and private.
  • Decluttering measure related to languages: Of the 22 official languages, the last four official languages — Bodo, Dogri, Maithili, and Santhali — not in currency due to space constraints.
    • All languages except English and Hindi could be dropped and limited to micro lettering.
• Enhance durability: Polymer notes have the potential for a lower carbon footprint and longer life.
• Representing country, capturing the imagination and celebrating rich diversity: Look beyond Mahatma Gandhi design, including likes of Srinivasa Ramanujan, Jamshetji Tata, Jagdish Chandra Bose, CV Raman, Homi J Bhabha, Rabindranath Tagore, Premchand, Ustad Allauddin Khan, Uday Shankar etc.
• Incorporate principles of universal design: Portrait orientation, as in Swiss franc or Argentinian peso.
• Procedural reforms: Central bank currency should be the central bank’s responsibility from concept and design to delivery with only limited consultation role of government.