In July 1995, this columnist filed a writ petition in the Mumbai High Court against the rbi's decision to change the machines that printed currency notes. Currency notes had always been printed on machines provided by a Swiss firm that catered to ninety per cent of the world's nations. The government wanted to shift to a Japanese firm with a dubious track record. The use of its machines had led to a crisis in the former Soviet Union.
The inferior printing techniques of the new machines facilitated printing of counterfeit notes as good as genuine notes. The petition described this as a serious national security hazard. The rbi conceded in court "the relative technical superiority" of the Swiss machines. It conceded that the new machines would be "deficient in certain areas". It conceded that there could be "teething troubles". Nevertheless, the rbi wanted to end the "monopoly power" of the Swiss firm. Was that the only reason for disregarding a threat to national security?
The court dismissed the petition. After that, fake currency notes started to proliferate. The banks hid from the public the fact that they could not distinguish between genuine and some new fake notes. The government hid from the media the fact that the crisis arose because inferior machines were now being used to print currency notes.
Early last month the cat was out of the bag. In response to police queries regarding a case of counterfeit notes, the rbi failed to distinguish the fake notes and referred the police to the Dewas Bank Notes Press that printed them. The police were stunned when the Dewas Press also expressed its inability to distinguish the fake notes. It advised reference to the finance ministry. If the situation persists, pending court cases of fake notes would result in acquittals.
Clearly, no official authority can distinguish genuine from fake notes. So go ahead. Print a billion worth of fake notes. Just make sure you destroy evidence of having printed them. Thereafter your fake notes are as valid as government notes. There is no legal tender in the country today.
Money, money, keep on talking,
Counterfeiters keep on walking,
There's no check in Hindustan,
Mera desh hai mahaan!
