‘Carbon footprint is less than paper notes’
Reserve Bank of India (RBI) Governor Duvvuri Subbarao said on Friday that the apex bank is planning to introduce plastic currency on a pilot basis. He was speaking as part of the leadership lecture series of the Indian Institute of Management (IIM-K) here.
Plastic money was already in circulation in Singapore and Australia. Its longevity was one of its main advantages. Also, since it would be in circulation for a longer period, impact to environment would be negligible, said Dr. Subbarao.
Reacting to criticisms about the environment unfriendliness of plastic currency, Dr. Subbarao narrated the contents of a letter that he got from a 15-year-old girl.
“She was the first one to question the usage of plastic for making currency. This aspect never occurred to anyone among us and it prompted us to rigorously study its environmental impact. The studies proved that the carbon footprint of plastic currency is much less than that of paper money. Hence we decided to go ahead with the pilot project,” said Dr. Subbarao.
Another topic of discussion was the RBI’s monetary policy in the face of inflation. Dr. Subbarao said that the inflation over the last two years had been ‘imported inflation’, related to the price of oil. The RBI could not control inflation even after an increase in interest rate and this prompted the corporates to accuse the bank of stifling growth.
“I am sympathetic to the genuine voice of the corporates. But inflation hurts the poor much more. Their voice is not represented in the media. They need to be heard as much as the corporates,” said Dr. Subbarao.
He said that inflation could not be controlled without sacrificing growth. The fall in growth rate was only for a short period of time. Medium-term growth would be secured, he added.
Earlier, Dr. Subbarao also inaugurated the RBI gallery at the Indian Business Museum at the IIM-K.