The federal government has authorized the introduction of 1 billion polymer banknotes of Rs 10 and Rs 20 for subject trials, Parliament was knowledgeable on Tuesday.
The Reserve Financial institution of India (RBI), with the advice of its central board, had despatched a proposal to the federal government when it comes to Part 25 of the Reserve Financial institution of India Act, 1934, for introduction of 1 billion items every of Rs 10 and Rs 20 polymer banknotes for subject trials and for normal issuance of polymer banknotes in these two denominations after profitable completion of subject trials, Finance Minister stated in a written reply to the Rajya Sabha.
“The proposal has been authorized by the federal government. As per the RBI, these polymer banknotes are proposed to be issued together with paper substrate-based banknotes,” she stated.
The RBI has knowledgeable that the procurement course of is presently at an preliminary stage, she stated.
Subsequently, she stated, at this level of time, it could not be attainable to practicably decide the precise timeframe for introduction of polymer banknotes or the expenditure more likely to be incurred thereon.
Replying to a different query, Sitharaman stated the typical retail inflation, measured by the Client Value Index (CPI), has declined steadily from 5.4 per cent in 2023-24 to 4.6 per cent in 2024-25 and additional to 2.1 per cent in 2025-26.
Owing to the commodity worth shock and elevated international vitality costs stemming from the West Asia disaster, a seasonal pickup in vegetable costs, and the anticipated unfavourable El Niño circumstances, retail inflation rose to three.9 per cent in Q1 of 2026-27, she stated.
Nevertheless, she stated, it’s nonetheless beneath the Reserve Financial institution of India’s inflation goal of 4 per cent.
“The 56th assembly of the Items and Providers Tax (GST) Council has introduced in a two-rate construction with a regular fee of 18 per cent, a benefit fee of 5 per cent and a particular de-merit fee of 40 per cent for a choose few items and companies (however inclusive of earlier compensation cess fee, and therefore with no enhance in general tax burden),” she stated.
This resulted in rationalisation of charges on many items and companies from 28 per cent to 18 per cent, 18 per cent to 12 or 5 per cent, and from 12 per cent to five per cent/nil.
As well as, she stated, with a view to cut back enter prices, boosting home manufacturing, selling export competitiveness and supporting strategic sectors, the federal government introduced in Union Funds 2026-27, rationalisation of Fundamental Customs Obligation (BCD) on a bunch of products with impact from February 2, 2026.
Further measures to include worth pressures in important commodities embody a discount in BCD on crude palm oil, crude soybean oil, and crude sunflower oil; a discount within the agriculture infrastructure and growth cess on masur; and a discount in central excise responsibility on petrol and diesel by Rs 10 per litre in March 2026, she stated.
Along with the reforms in oblique taxes, the federal government has elevated people’ disposable revenue by exempting annual incomes as much as Rs 12 lakh (Rs 12.75 lakh for salaried people, after the usual deduction) from revenue tax.
These measures have supported family consumption, as evidenced by the share of personal closing consumption expenditure in GDP remaining broadly steady at 56.5-56.7 per cent (base yr 2022-23), she stated.
Furthermore, as per the most recent GDP estimates launched by the Ministry of Statistics and Programme Implementation, per capita Personal Last Consumption Expenditure (PFCE) recorded a strong development of 6.8 per cent in 2025-26, up from 4.8 per cent in 2023-24.
Nonetheless, she stated, the federal government repeatedly screens the value scenario within the nation and undertakes fiscal, administrative and supply-side measures, as warranted by evolving financial circumstances, to guard the buying energy of households, significantly low- and middle-income households.
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