V3I6P35

Plastic Currency: The Need for a Durable and Sustainable Future for India’s Economy

Prof. Tapan Kumar Shandilya^1,2*

Abstract

Despite India’s global leadership in digital transactions, currency in circulation grew by over 11% in 2025–26, revealing a paradox where cash demand accelerates alongside digital adoption. This paper argues that polymer banknotes represent not a technological novelty but a strategic imperative for India’s economy. Evidence from three decades of international adoption demonstrates that polymer notes last 2.5 to 6 times longer than paper notes, reduce counterfeiting rates from 470 ppm to approximately 10 ppm (Canada), and generate net savings exceeding $1 billion over 25 years (Australia). Life cycle assessments confirm polymer’s superior environmental performance, with 30% lower greenhouse gas emissions and up to 90% reduced water consumption compared to paper. For India, where the RBI spent over ₹6,300 crore on security printing in 2024–25 and detected a 37.3% increase in counterfeit ₹500 notes, transitioning lower denominations (₹10, ₹20) to polymer would dramatically reduce replacement costs, enhance public hygiene through non-porous surfaces, and embed advanced security features including transparent windows and micro-optic structures. While initial capital expenditure for ATM upgrades and public education presents challenges—evident in the UK’s £240 million transition cost—the long-term economic, environmental, and security benefits substantially outweigh upfront investments. The paper concludes that polymer currency is not a competitor to digital payments but an essential foundation for a resilient, inclusive, and sustainable cash system serving millions of Indians who continue to rely on physical money.

Keywords:

Polymer banknotes, plastic currency, currency management, sustainable finance, digital payments, RBI, counterfeiting prevention, circular economy