India Soon To Have Plastic Notes As RBI's Proposal For Polymer Banknotes Approved; What Govt Said In Parliament
- Government approves field trials for polymer banknotes (Rs 10, Rs 20).
- Retail inflation declined, and GST rates were rationalised for numerous items
- Tax exemptions and duty cuts boosted household spending and production.
The Union Finance Minister on Tuesday informed the Rajya Sabha that the government has authorised field trials for one billion polymer banknotes in Rs 10 and Rs 20 denominations. Following a proposal from the RBI Board under Section 25 of the RBI Act, 1934, these notes will undergo testing before potential regular issuance upon successful trial completion.
"The proposal has been approved by the government. As per the RBI, these polymer banknotes are proposed to be issued along with paper substrate-based banknotes," she said in a written reply.
The Plan Is At An Initial Stage
The Finance Minister further noted that the Reserve Bank of India is currently in the initial stages of the procurement process. Regarding broader economic trends, she highlighted a consistent decline in average retail inflation, as measured by the Consumer Price Index (CPI), which dropped from 5.4 per cent in 2023-24 to 4.6 per cent in 2024-25, and further to 2.1 per cent in 2025-26.
While retail inflation did see a seasonal uptick to 3.9 per cent in the first quarter of 2026-27—driven by elevated energy costs from the West Asia crisis, rising vegetable prices, and anticipated El Niño conditions—it remains within the RBI's 4 per cent target.
