India Today's 10 Crore Fake Rupee Boondoggle
Are Pakistani spies flooding vast amounts of fake cash into the Indian economy with the intend ot devaluing the rupee? That the question that India Today wants you to ask this week with its cover story titled Fake Currency, The New Threat. It's a solid topic for an investigative piece, too bad they don't have any evidence for the claim.Quoting a mid-level minion on Maharashtra's Anti-Terror squad named Param Bir Sing, reporter Malini Bhupta claims that 8 out of every 1000 notes are counterfeit. Never mind that the anti-terror squad doesn't have jurisdiction over currency matters, the rate of .8% isn't exactly staggering.
Which is to say, in absolute terms, peanuts.
The real story killer comes when you start to read the data they've collected. In 2007, when counterfeiting in the country was at its absolute worst, the police seized about Rs. 10 crore (about $4 million) worth of fake notes. In addition to those busts, all commercial banks in the country combined reported receiving rs 5 crore ($2.5 million).
By contrast, in 1993 alone, the US seized $120 million in counterfeit currency.
Even if they were off by a factor of 10, and there was $70 million worth of fake rupees changing hands in a year, it would barely be a hiccup on India's road to development.Given that India's GDP is $3.319 trillion. It would take billions of fake notes to even come close to making a dent in the economy. Counterfeiting isn't much of a problem at all. In fact, the total fake currency detected by the government between 2001 and 2007 comes to just 61.7 crore rupees, or about $15 million. Which is to say, a little less than a nice apartment in Mumbai.
There is no way that a story like this should pass through even a rudimentary fact checking process, let alone end up on the cover of a national magazine. India Today is becoming the Fox News of South Asia. The claim of a counterfeit menace doesn't even stand up to its own internal logic and seems only aimed at scaring readers into believing that Pakistan is up to no good dirty tricks.
Labels: crime, India, Indian media, Pakistan
posted by Scott Carney @ 7:34 PM
9 comments
9 Comments:
"8 out of every 1000 notes are counterfeit. Nevermind that the anti-terror squad doesn't have jurisdiction over currency matters, the rate of .08% isn't exactly staggering."
8 out of 100 is 8%
8 out of 1000 is 0.8%
hah! Thanks for calling me out. I've fixed it.
Not sure how GDP is relevant. The Rs. 1000 note hasn't been redesigned since 2000. In the late '90s no one was taking higher denomination bills due to the prevalence of counterfeits.
In 2006, the treasury said US counterfeits were 1 in 10k or .01% - which is nearly two orders of magnitude less than the rate for the Rs 1000 note. Of course that's not broken down by denomination, and most fakes are probably $100 notes, but I'm certain even the $100 figure would be less than .1%.
If you're looking at GDP you might want to consider the ratio of currency in circulation to GDP. India has about US $100 billion in circulation (5 trillion INR) or 3% of GDP. The US has almost $800 billion in circulation, for 6% of GDP. That might suggest India's economy as a whole is more insulated (or only half as exposed.) But when you consider the portion of the population which participates exclusively in the cash economy, and a counterfeiting problem 8 to 80 times as bad, it seems like something to be taken seriously.
But that's assuming that Param Bir Singh has the right numbers. I find it hard to believe that $6-$7 million in fake rupees is even close to .8% of the amount of rupees circulating. That would mean that there are only $700 million in rupees circulating. I find that hard to believe. I think he made it up. But I haven't yet been able to find the number of circulating rupees online.
Why havent you written on the Satyam scandal yet? Lookiing forward to your blog on that.
A big fan of your writing
Thanks for the vote of confidence Arun. I don't know enough about the Satyam scandal to do it justice. I feel like I could only tackle it if I had an inside perspective. Though I have to admit, I did pitch it to an editor in the states for a story, but there have been so many financial disasters lately that it didn't catch much interest.
There has been massive increase in fake rupee circulation in the recent years. It is estimated that around 1.3 trillion rupees is already in circulation all over India. Govt has no action or preventive measurements in this case.
Fake notes a menace in the society is creating troubles. However if proper awareness is given it can lead to reduce the menace.
To know more about fake note detection for Indian rupee, click below:
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There is no point in honking the horn where actually there is no one out there. the system failure in india is the big problem.
we are just getting used to whatever that come across. I have found the original currency itself deviating from security features so many times.
The public awareness is the key to getting this menace handled, apart from this the govt. should formulate laws like life term for fake currency circulation if found guilty.
Telgi is yet to be convicted for gross sins he has done. He's spared simply because he has the contacts of the VIPs who are his partner in this scam.
Long Live India! with the scrap system in place. As part of my corrective action i would suggest you these links for reference, if you need more knowledge about how to know your currency well.
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Vinnie.
Fake currency notes.
why cant we take any action for this? what is our govt. doing for this? i am an ordinary indian who faces this problem every day. we know the kind our govt. is can hardly do any thing for our country. but i know there are many intellectual people in our country who can solve this problem. i think technology is a boon if applied correctly or else it can destroy everything. we a common man should again come together and free our country from this.
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