- Nirmala Sitharaman has clarified that the government is not planning to print more currency to deal with the economic crisis.
- He said this in reply to a written question in Lok Sabha.
- Experts have suggested the government to print more currency notes to help the economy affected by Kovid-19.
Printing of Currency: Finance Minister Nirmala Sitharaman The government on Monday said in the Lok Sabha that the government has no plans to print currency notes to tide over the current economic crisis arising out of the outbreak of the Kovid-19 pandemic. The Finance Minister was asked whether there is any plan to print currency notes to overcome the economic crisis. In a written reply to the question, he said, “No.” Several economists and experts have suggested the government to print more currency notes to help the economy hit by the COVID-19.
What could be the danger by printing new notes
If the government considers printing new notes, then its biggest danger will be that it can increase inflation. Governments of countries like Zimbabwe and Venezuela also printed notes to give relief, after which inflation broke all records. The result was that in 2008 the rate of inflation reached in crores. People had to carry money in big bags for small things. Those pictures upset the whole world.
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effect of inflation
This increase in inflation is called hyperinflation in economics. Once the economy of a country reaches hyperinflation mode, it proves difficult to get out of there. The monetary policy of the country has an equal impact on all the citizens of the country. After rising inflation, the purchasing power of all the people of the country decreases. Accordingly, they have to pay more tax indirectly.
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