Impact of Fake Money on Indian Economy

IMPACT OF FAKE MONEY ON INDIAN ECONOMY.

The Fake Currency Notes Syndrome According to the Reserve Bank of India (RBI), in the last six years, approximately Rs. 76 crores of fake notes were seized. The RBI speaks only about the seized money. However, a report from a Parliamentary Committee states that fake notes worth Rs. 1,69,000 crores are distributed in the market. But in reality, nobody knows the total number of fake notes which are floating around in the market and being passed off as genuine. The question then arises: what are organisations like the RBI, Central Bureau of Investigation (CBI) and the National Investigation Agency (NIA) doing to reduce this problem? When it comes to the Central Government, doesn't it have information about the people who are responsible for perpetuating this vicious circle of fake notes in the country? It is quite interesting to note that whenever fake notes have been caught, accusing fingers are pointed directly at one particular country - Pakistan, and on one particular organisation -- the Inter Services Intelligence (ISI). But they are not the only ones responsible in the shocking story of fake notes. There are some others as well about whom both the Government and the Investigative Agencies (IA) are fully aware, but do not disclose publicly. Meanwhile, according to documents, during 2011-2012, an amount worth Rs. 24.7 crores in fake notes was seized. According to statistics, this amount is five times more than the amount of fake notes which were seized five years ago. The RBI started the work of seizing fake notes in 1996. And according to the RBI, in the last five years, approximately Rs. 76 crores has been seized. The fake notes seized during the period 2010-2011 amounted to Rs. 18.9 crores; in 2009-2010 they amounted to Rs. 16.45 crores, in 2008-2009 they amounted to Rs. 15.5 crores and during the period 2007-2008 they amounted to Rs. 4.54 crores. When we compare the seized amount of fake notes between 2007-08 and 2011-12, the latter are approximately five times more. In this amount, 500 rupees notes are the maximum. In a reply from the Home Ministry available with the the Delhi based leading publication, Chauthi Duniya, the RBI, the Finance Ministry, the Home Ministry, IA and the NIA have been empowered with the responsibility of tackling the situation. But the big questions remain: has the NIA been able to identify the people and the companies involved in the fake notes racket? And if they have been identified, then at what stage are they at this point of time and has the information which has been unearthed been provided to the public or the media?

As mentioned earlier, whenever fake notes are seized, the names of Pakistan and the ISI always come to the forefront, but this is only partially correct. In the actual story, there are others involved in this conspiracy, namely, the few companies who had a role earlier in the printing of currencies or supply of currency papers for India. A Parliamentary Committee Chaired by V. Kishore Chandra Singh Deo, gave a report some time ago. If this report is correct, then America, Germany and England might also be involved in the conspiracy. The Parliamentary Committee gave indications of this in its report. The fact is that in 1996-97, the RBI was in need of notes amounting to a total of Rs. 3,35,900 crores. However, they had a total of printed notes of only Rs. 2,16,575 crore at that point of time. Obviously, the RBI was in need of notes to the tune of Rs. 1,20,000 crores. Citing this reason, the RBI and the then Finance Minister decided to have Indian currency notes printed through foreign agencies/companies. Taking this decision into consideration, would it be wrong to presume that the agencies/companies involved might also be involved in the racket of fake currency notes? It is therefore a valid assumption that the decision taken by the Indian Government in 1997 affected the country adversely. Can the RBI and P. Chidambaram (the present and 'then' Finance Minister) take the guarantee of proving that the assumptions and presumptions that have been made are incorrect? Moreover, there are other important questions that need an answer: Even so many years after Independence, are the mints of the country incapable of printing currency notes in accordance with the needs of the country? If there was a need to print a larger number of notes in 1997 and the mints were incapable of printing the numbers required, why were efforts not made to make these mints capable of printing the required number of notes? Why was the printing of notes done in foreign countries? The report of the Parliamentary Committee states that the contract for printing Indian currency notes through foreign companies had a proviso that after the completion of printing, the note plates and the ink would be destroyed. Whether the companies abided by the contract rules is still an open question. The RBI is not giving guarantees that the companies fulfilled all the requirements in the contract. The most disturbing element is that the present Government is totally silent on this issue.

The entire fake currency note issue is related to the economic safety of the country. This issue is also about keeping Parliament and the public in the dark. Chauthi Duniya had earlier, with the help of its reports, said that the companies who had been printing Indian currency notes could well be the companies who might also be involved in the printing of fake 500 and 1000 rupee notes. (Refer Box Story). The question is: why is there silence on this dangerous controversy from the Government and the above mentioned agencies/ companies? It is quite interesting to note that whenever fake notes have been seized, accusing fingers are pointed directly at one particular country;Pakistan, and on one particular organisation -- their Inter Services Intelligence (ISI). But they are not the only ones responsible in the shocking story of fake notes. A Parliamentary Committee Chaired by V. Kishore Chandra Singh Deo, gave a report some time ago. If this report is correct, then America, Germany and England might also be involved in the conspiracy.