Government Clears Polymer Currency Trial, ₹10 And ₹20 Notes To Circulate Alongside Paper Money

Finance Minister Nirmala Sitharaman announced the government's approval for introducing polymer banknotes in ₹10 and ₹20 denominations, as informed to Parliament on Tuesday. The Reserve Bank of India had proposed this initiative after receiving recommendation from its central board, under Section 25 of the Reserve Bank of India Act, 1934.

If the field trials prove successful, polymer notes may be issued regularly in both denominations, coexisting alongside existing paper currency. However, the procurement process is still in its early stages, and hence, a launch date and expenditure cannot be determined at this time.

Meanwhile, Sitharaman shared in a separate reply that average retail inflation has decreased from 5.4 percent in 2023-24 to 4.6 percent in 2024-25, and further to 2.1 percent in 2025-26. Despite global factors like higher energy prices, the West Asia crisis, seasonal vegetable price increases, and anticipated unfavorable El Niño conditions, retail inflation remained below the RBI's 4 percent target in the first quarter of 2026-27, settling at 3.9 percent.

Sitharaman also highlighted tax relief measures introduced by the government, including GST changes that reduced tax rates on several goods and services to 5 percent and 18 percent, with a special 40 percent rate for selected items. The Union Budget 2026-27 further decreased the Basic Customs Duty on several products, aiming to support manufacturing, improve export competitiveness, and lower input costs for businesses.

Additionally, the Union government exempted annual income up to Rs 12 lakh from income tax, with salaried individuals having an effective limit of Rs 12.75 lakh after the standard deduction. These measures are intended to support household spending, as per capita private consumption expenditure grew by 6.8 percent in 2025-26, compared to 4.8 percent in 2023-24.