Economics

What is the Currency of India?

The official currency of India is the Indian rupee.

The currency which circulates in India’s economy is the Indian rupee. The rupee derives its name from ‘rupiya,’ which was a silver coin released in the 16th century by Sultan Sher Shah Suri. The rupee contains 100 paise, although 25 paise is no longer regarded as legal tender. The Reserve Bank of India controls the disbursement of the rupee.

History

By the 6th century BCE, medieval India was using coins. During the governance of Sultan Sher Shah Suri from 1540 to 1545, he oversaw the issue of silver coins termed rupiya. The silver coin continued to circulate through the Mughal period, Maratha era, and in British India. Paper rupees were subsequently introduced by the Bank of Hindustan, the Bengal Bank, as well as the General Bank of Bengal and Bihar. The rupee was severely devalued in the 19th century, when the discovery of vast silver deposits in some European colonies and the United States led to the devaluation of silver in comparison to gold. The British failed to de-popularize the rupiya in place of the British sterling pound and gave the rupee official status in India after the revolt of 1857. The portrait of King George VI was printed in place of earlier designs and Queen Victoria's portrait was adopted in 1862. The Reserve Bank of India began operating in 1935 with the task to distribute rupee notes. India's monetary system was reformed in the post-independence era.

Modern Coins

The initial rupee coins minted in the independent India were released in 1950. These coins consisted of 1 pice, 1/2, one, and two annas, as well as 1/4, ½, and one rupee denominations. These series were followed by the decimal issues introduced in 1957. The first issue featured 1, 2, 5, 10, 25, and 50 naye paise in addition to 1 rupee. The term naya was dropped in 1964. India's coins have undergone changes over the years, and the 1, 2, 5, and 10 rupees are the most common in circulation. The government is in control of five mints at NOIDA, Mumbai, Cherlapally, Saifabad, and Alipore. The government released coins featuring the prints of Indian religious and historical figures and statesmen post-independence. Commemorative coins have been released in India, such as the 100 coin released to mark the 100th anniversary of Mahatma Gandhi's homecoming.

Banknotes

The Indian government disbursed its first paper currency in 1861. The colonial designs were done away with in the post-independence period. The Mahatma Gandhi series of 5, 10, 20, 50, and also 100 rupees is the current series in circulation. The 500 and 2,000 rupee denominations are included in the Mahatma Gandhi New Series. Printed on the banknotes is a Mahatma Gandhi portrait. The Lion Capital Series consists of the denomination of one. India's central government adopts the design of banknotes upon advice from the Reserve Bank's central board.

Emerging Concerns

There have been debates on the withdrawal of notes with higher denominations to control the circulation of counterfeit and unaccounted money. On November 8, 2016, the nation's government ordered the demonetization of the 500 and 1000 rupee notes included in the Mahatma Gandhi Series. The government stated that the move was needed to curb counterfeit cash and put a reign on the shadow economy. However, the move triggered cash shortages and affected the Indian economy.

More in Economics