Rain or accidental laundry can soak currency notes inside pockets. Age can also make paper currency tear through the middle. Now, the government plans a possible solution for this everyday problem. It has taken a major step towards introducing ₹10 and ₹20 polymer notes nationwide. Parliamentary information shows authorities will initially conduct field trials. Each denomination will enter markets through one billion trial notes. The Finance Minister disclosed this development through a written Rajya Sabha reply.
Earlier, the Reserve Bank of India sent government a special proposal. RBI submitted its recommendation under Section 25, Reserve Bank of India Act, 1934. The proposal sought field trials for ₹10 and ₹20 polymer currency. Subsequently, the government approved RBI’s recommendation. Therefore, successful trials could open regular public use of plastic notes later. However, authorities have not fixed any confirmed launch date. RBI says procurement currently remains at a very early stage. Consequently, officials cannot yet provide an exact cost estimate.
Paper Currency Will Continue as Inflation Falls Sharply
Naturally, new currency raises questions about existing paper notes. However, the government has clearly removed fears over their withdrawal. Polymer versions will not replace current paper currency under this plan. Instead, both formats will circulate together across markets. People can continue using existing notes for shopping or other transactions. The decision aims only to increase currency durability.
Meanwhile, Parliament also received encouraging economic figures alongside this announcement. CPI figures showed a sharp decline in retail inflation across recent financial years. It stood at 5.4 percent during 2023-24. Subsequently, the rate fell to 4.6 percent in 2024-25. Inflation then declined further, reaching only 2.1 percent during 2025-26.
However, pressures returned slightly during 2026-27’s first quarter. West Asian tensions, higher crude oil prices, and El Nino effects pushed CPI towards 3.9 percent. Even so, inflation remained below RBI’s 4 percent target.
Tax Relief Measures Aim to Leave More Money With Families
Additionally, the government has pursued measures aimed at leaving middle-class families with more spending money. Recent steps include GST rate changes featuring an 18% standard slab. Alongside that level, authorities introduced a 5% concessional rate.
Taxpayers also received relief through tax-free annual income up to ₹12 lakh. For salaried people, standard deduction raises that exemption limit to ₹12.75 lakh.
Furthermore, the government cut central excise duty on petrol and diesel during March 2026. That reduction amounted to ₹10 per litre. Authorities also lowered customs duty on edible oil.
According to the reference, these decisions supported stronger private consumption expenditure. PFCE growth increased from 4.8% in 2023-24, reaching 6.8% during 2025-26.
