Millennium Post

A real solution to fake notes

It is a positive development that India is planning to seek the technological cooperation of the United States in order to check the flow of fake Indian currency notes. The US has considerable technological resources devoted to this problem as also experience in the matter, including that of crime-fighting, having been subjected to assaults on its currency at various periods in its history. It will, therefore, be able to provide the necessary help when it shares its experience with this country. India is a victim of similar onslaught on its currency. While it is difficult to estimate the total amount of fake currency in circulation in India, during the years 2006-09, 7.34 lakh Rs 100 notes, 5.76 lakh Rs 500 notes and 1.09 lakh Rs 1,000 notes, all of which were fakes, have been seized, which makes a total of Rs 47.04 crore, according to figures disclosed in Parliament by the government. This is probably only the tip of the iceberg when compared to the total number of notes in circulation. It is hardly necessary to spell out the havoc that such notes can induce within the economy.

Fake notes undermine a country’s confidence in its financial system and its currency and leads to uncertainty, all the more severe in the current scenario of financial downturn and low growth. Much of the counterfeit money is used to finance criminal activity such as drugs or  illegal  arms trade. Unfortunately, a major source of fake Indian currency notes is Pakistan, where mafias operate to smuggle them into India using various routes. In this version of cross border enmity, the objectives are to subvert Indian economy and to fund terror networks. Finance minister Pranab Mukherjee had noted last year that the pumping of counterfeit currency was used as a policy matter by some countries to destabilise the economy. It is, thus, a serious threat.

It is increasingly difficult to distinguish between fake and real currency notes in part because of improvements in printing technology as also the easy availability of security paper on which such notes are printed. It is time India confronted this menace with all available resources and all possible means. Fighting fake notes with the help of the technological and crime fighting prowess of the US is a good step forward.
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