Nirmala Sitharaman: Centre approves introduction of one billion polymer banknotes of Rs 10 and 20 for field trials

The government has approved the introduction of one billion polymer banknotes of Rs 10 and Rs 20 for field trials Parliament was informed on TuesdayThe Reserve Bank of India RBI with the recommendation of its central board had sent a proposal to the government in terms of Section 25 of the Reserve Bank of India Act 1934 for introduction of one billion pieces each of Rs 10 and Rs 20 polymer banknotes for field trials and for regular issuance of polymer banknotes in these two denominations after successful completion of field trials Finance Minister said in a written reply to the Rajya SabhaThe proposal has been approved by the government As per the RBI these polymer banknotes are proposed to be issued along with paper substratebased banknotes she saidThe RBI has informed that the procurement process is presently at an initial stage she saidTherefore she said at this point of time it would not be possible to practicably determine the exact timeframe for introduction of polymer banknotes or the expenditure likely to be incurred thereonReplying to another question Sitharaman said the average retail inflation measured by the Consumer Price Index CPI has declined steadily from 54 per cent in 202324 to 46 per cent in 202425 and further to 21 per cent in 202526Owing to the commodity price shock and elevated global energy prices stemming from the West Asia crisis a seasonal pickup in vegetable prices and the expected unfavourable El Nino conditions retail inflation rose to 39 per cent in Q1 of 202627 she saidHowever she said it is still below the Reserve Bank of Indias inflation target of 4 per centThe 56th meeting of the Goods and Services Tax GST Council has brought in a tworate structure with a standard rate of 18 per cent a merit rate of 5 per cent and a special demerit rate of 40 per cent for a select few goods and services but inclusive of earlier compensation cess rate and hence with no increase in overall tax burden she saidThis resulted in rationalisation of rates on many goods and services from 28 per cent to 18 per cent 18 per cent to 12 or 5 per cent and from 12 per cent to 5 per centnilIn addition she said with a view to reduce input costs boosting domestic manufacturing promoting export competitiveness and supporting strategic sectors the government announced in Union Budget 202627 rationalisation of Basic Customs Duty BCD on a host of goods with effect from February 2 2026Additional measures to contain price pressures in essential commodities include a reduction in BCD on crude palm oil crude soybean oil and crude sunflower oil a reduction in the agriculture infrastructure and development cess on masur and a reduction in central excise duty on petrol and diesel by Rs 10 per litre in March 2026 she saidIn addition to the reforms in indirect taxes the government has increased individuals disposable income by exempting annual incomes up to Rs 12 lakh Rs 1275 lakh for salaried individuals after the standard deduction from income taxThese measures have supported household consumption as evidenced by the share of private final consumption expenditure in GDP remaining broadly stable at 565567 per cent base year 202223 she saidMoreover as per the latest GDP estimates released by the Ministry of Statistics and Programme Implementation per capita Private Final Consumption Expenditure PFCE recorded a robust growth of 68 per cent in 202526 up from 48 per cent in 202324Nevertheless she said the government continuously monitors the price situation in the country and undertakes fiscal administrative and supplyside measures as warranted by evolving economic conditions to protect the purchasing power of households particularly low and middleincome householdsThis story has been sourced from a third party syndicated feed agencies Midday accepts no responsibility or liability for its dependability trustworthiness reliability and data of the text Midday managementmiddaycom reserves the sole right to alter delete or remove without notice the content in its absolute discretion for any reason whatsoever