For every one million currency notes, there are eight fake notes floating in the country. While the percentage of fake notes may still be 0.001, the government is concerned as their circulation has grown in alarming quantities over the past few years.
According to a recent report by the Ministry of Finance submitted to the Parliamentary Standing Committee on Public Undertakings (CoPU), the value of fake currency seized and recovered increased to Rs 10.54 crore (Rs 105.4 million) in 2007 from Rs 8.39 crore (Rs 83.9 million) in 2006.
In 2008, the government recovered Rs 25.79 crore (Rs 257.9 million) worth of fake notes, and till September 2009, Rs 14.08 crore (Rs 140.8 million). In other words, from 2006 to 2008, the country witnessed almost 300 per cent rise in the circulation of fake notes.
But CoPU is "aghast" to see that the central government in 1997-98 had outsourced the printing of the currency to three foreign countries.
The tender was issued by the Reserve Bank of India, but the decision was taken by the then Union Cabinet. H D Deve Gowda was the prime minister and P Chidambaram was the finance minister. Ironically the home minister of the present UPA government faces the challenge to stop the use of counterfeit notes.According to a CoPU report submitted to Parliament today on the functioning of the Security, Printing and Minting Corporation of India Ltd (SPMCI), this step contained "grave risk of unauthorised printing of excess currency notes, which could have been unaccounted money".
The committee was informed that 2,000 million notes of 100-rupee denomination and 1,600 million notes of 500-rupee denomination were outsourced for printing at three different sites. They were US-based American Banknote Company (635 million notes), UK's Thomas De La Rue (1,365 million notes) and Giesecke & Devrient Consortium of Germany (1,600 million notes). It was the first and last outsourcing in that period.
Rejecting an RBI argument for the outsourcing, the CoPU has observed: "The committee simply wonders how come a decision was taken to have the currency notes printed by these companies in three different countries. Logically speaking, since all the said three countries are well-developed, each country certainly had the capability of undertaking the entire printing assignment."
