On Thursday, the Delhi Police seized fake currency notes of the face value of over Rs 6 crore from two tempos – the largest haul in five years. That’s more than three-quarters of the Rs 8.4 crore seized in the previous five years.
There are no prizes for guessing where these notes — all bundles of Rs 500 and Rs 1,000 notes — came from. The Indian Express says police chief BK Gupta suspects the hand of a "neighbouring country" in all this. Since the Nepalese, Bangladeshis and Sri Lankans are not known to be keen to help the Reserve Bank increase money supply in India, he obviously means Pakistan.
For quite some years now, our intelligence agencies have been saying that Pakistan has been trying to damage us economically by pushing in counterfeit notes smuggled through our porous borders with Nepal, Bangladesh and even directly through Punjab and Rajasthan.
Now, this boggles the mind. After all, why do we need the Pakistanis to damage us economically when we have been trying hard to do the same for the last few years? We have been fuelling currency debauchery through our own profligate actions on the fiscal front. We have brought the rupee down by policy paralysis and denting business confidence.
In fact, India has been downright cussed in seeing this Pakistani note-printing frenzy as some kind of unfriendly act when it should be thanking the neighbour for all the help it has given us in difficult times.
The fact is the whole world has been in note-printing mode since 2008: the US called it Quantitative Easing (QE1, QE2, etc) ; the UK has been in loose-money mode for more than three years; Japan has been printing yen like crazy to prevent it from appreciating against the dollar; Europe will soon join the party to rescue its southern fringe from going under.
Our own note printing presses have been going full tilt to feed the fiscal feeding frenzy – at great cost.
It costs us Rs 3.14 to print each Rs 1,000 currency note. It costs 48 paise to print a Rs 5 note. In fact, in 2010-11 the Reserve Bank of India spent over Rs 2,300 crore to print 1,650 crore currency notes of various denominations.
It’s costing us a lot of money to even print our money.
Enter Pakistan, eager to help. They not only print our notes, but also transport it in tempos and reach them all over the country. It's doorstep delivery, and should find itself in Harvard case studies about how to create customer delight. They are doing us a favour and we curse them. We blame them for economic warfare. Is there no justice in the world?
From all the fake currency seizures we have seen over the years, it is clear that Pakistan wants to help us print our money in large numbers. Our intelligence sleuths even think that they have stolen key elements of our design – and find it difficult to differentiate fake notes from the originals.
Clearly, the solution is staring us in the face. The RBI should outsource currency printing to the Pakistanis.
Instead of accepting their hand of friendship in good faith, here we are thinking they are waging an economic proxy war.
Updated Date: Jan 14, 2012 09:24 AM