Government Clears Introduction of One Billion ₹10 and ₹20 Polymer Banknotes

The government has approved the introduction of 1 billion polymer banknotes in the denominations of ₹10 and ₹20 for field trials, following a proposal from the Reserve Bank of India (RBI), as per The Hindu news reports citing a PTI report.  

This move aims to transition these notes into regular circulation post successful trials. 

RBI's Polymer Banknotes Proposal 

The approval for these polymer banknotes comes after the RBI, on the recommendation of its central board, proposed to introduce 1 billion pieces each of the ₹10 and ₹20 notes under Section 25 of the Reserve Bank of India Act, 1934.  

The Finance Minister confirmed this development in a written reply to the Rajya Sabha. The RBI is planning to issue these polymer notes alongside traditional paper money initially. 

Procurement Process and Field Trials 

According to the Finance Minister, the procurement of these polymer banknotes is currently in its initial stages. Due to the nascent phase of the procurement process, the exact timeline and financial implications of introducing these notes remain indeterminate at this moment. 

Inflation Trends and GST Updates 

The Finance Minister also commented on the country's inflation trends, noting a decline in average retail inflation from 5.4% in 2023-24 to 2.1% in 2025-26. Despite a rise to 3.9% in Q1 of 2026-27, it remains below the RBI's target.  

Additionally, the Goods and Services Tax (GST) Council has modified its rate structure by introducing a standard rate of 18%, a merit rate of 5%, and a special de-merit rate of 40% for selective goods and services. 

Read More: KPI Green Energy Share Price Falls Over 7% After Q1 FY27 Earnings Results: Total Income Up 15.6% YoY! 

Fiscal Measures and Economic Impact 

In an efforts to boost domestic manufacturing and support strategic sectors, the government has announced rationalisations in Basic Customs Duty on February 2, 2026, as per the report.  

Measures to curb inflation include reductions in various taxes and duties, which have supported household consumption, evidenced by private final consumption expenditure stabilising at 56.5-56.7% of GDP. 

Conclusion 

The Indian government's approval for 1 billion ₹10 and ₹20 polymer banknotes marks an important trial phase for introducing polymer currency. Meanwhile, India's average retail inflation saw a decrease to 2.1% by 2025-26, despite a slight rise to 3.9% in early 2026-27, combined with GST adjustments that have affected tax structures. 

Track the stock market in Hindi. Visit Angel One News for the latest market trends, insights, and share market news in Hindi. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities or companies mentioned are only examples and not recommendations. This does not constitute a personal recommendation or investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Investments in the securities market are subject to market risks. Read all related documents carefully before investing.