India's currency printing presses have reportedly demanded Rs 577 crore from the Reserve Bank of India (RBI) as reimbursement for losses incurred over Prime Minister Narendra Modi's demonetisation drive last year.
According to Indian Express, the big amount demanded from the central bank is mainly because of importing currency note paper and other printing materials used for printing old Rs 500 and Rs 1,000 notes. The notes which were in the process of being printed and the notes which were ready to be shipped were all wasted after Modi's surprise move to abolish the high-value currency notes.
Although the government claims that demonetisation has played a crucial role in wiping out black money from the economy, the move raises several doubts and its poor execution has dented the government's and central bank's reputation of efficiency.
After, scrapping Rs 500 and Rs 1,000 notes in a surprise move last year, the RBI had spent Rs 7,965 crore on printing new currency notes. The central bank also released Rs 200 notes last month and said that they have also started to print Rs 1,000 notes as well.
Adding to the central bank's woes, the top government officials and officials in the currency paper printing establishment told Indian Express that the matter was under discussion and since the printing presses were captive units they do no commercial work.
The losses they incurred on account of demonetisation would surely have to be offset.
At present, there are four note printing presses in India and the calculation sent to the RBI is the total amount of losses and wastages incurred collectively by them.
The production of bank notes, coins, non-judicial stamps, postage stamps and other government related documents is managed by Security Printing and Minting Corporation of India Limited (SPMCIL). It was established in 2006 and has four printing presses – Currency Note Press, Bank Note Press, India Security Press and Security Printing Press.