Govt approves trial of plastic-made ₹10 and ₹20 banknotes:Centre to issue 100 crore polymer notes in the country

The government has approved the field trial of polymer banknotes of ₹10 and ₹20. 100 crore polymer notes of both denominations will be issued. Finance Minister Nirmala Sitharaman gave this information in a written reply in Rajya Sabha on Tuesday. The Reserve Bank of India (RBI) had sent this proposal to the government under Section 25 of the RBI Act, 1934 on the recommendation of its Central Board. Notes will be issued regularly after successful trial RBI had proposed a field trial of 100 crore polymer notes each of ₹10 and ₹20. After the successful trial, there is a plan to issue polymer notes of both these denominations regularly. The Finance Minister said that the government has approved the proposal. According to RBI, polymer notes will be issued along with paper notes. She informed that the procurement process of polymer notes is still in the initial stage. Therefore, at present it is not practically possible to assess the exact timeline of their issuance and the expenditure to be incurred on this. Inflation Reduced to 2.1% in 2025-26 In response to another question, Sitharaman stated that the average retail inflation measured by the Consumer Price Index (CPI) decreased from 5.4% in 2023-24 to 4.6% in 2024-25 and 2.1% in 2025-26. She said that inflation increased due to commodity price shocks from the West Asian crisis and high energy prices worldwide. Retail inflation rose to 3.9% in the first quarter of 2026-27 due to seasonal spikes in vegetable prices and concerns about adverse El Nio conditions. However, this is still below the RBI’s 4% inflation target. GST Rates at 18%, 5%, and 40% The Finance Minister said that a two-rate structure was introduced in the 56th meeting of the GST Council. This includes a standard rate of 18%, a merit rate of 5%, and a special demerit rate of 40% for select goods and services. She stated that the 40% rate includes the previous compensation cess. Therefore, there has been no increase in the overall tax burden. This change has reduced the rates of many goods and services from 28% to 18%, from 18% to 12% or 5%, and from 12% to 5% or zero. Excise duty on petrol, diesel reduced by ₹10 Sitharaman said that to reduce input costs, increase domestic manufacturing, strengthen export competitiveness and support strategic sectors, the government has made changes in Basic Customs Duty (BCD) on several goods. These changes announced in the Central Budget 2026-27 came into effect from February 2, 2026. To reduce the price pressure on essential commodities, BCD has been reduced on crude palm oil, crude soybean oil and crude sunflower oil. Additionally, the Agriculture Infrastructure and Development Cess on lentils has been reduced. In March 2026, the central excise duty on petrol and diesel was reduced by ₹10 per litre. Tax exemption on annual income up to ₹12 lakh The Finance Minister said that along with reforms in indirect taxes, the government has also increased the disposable income of people. Annual income up to ₹12 lakh has been exempted from income tax. For salaried people, annual income up to ₹12.75 lakh is tax-free after standard deduction. He said that these measures have supported domestic consumption. The share of private final consumption expenditure in GDP has remained almost stable between 56.5% to 56.7% on the base year of 2022-23. According to the latest GDP estimates released by the Ministry of Statistics and Programme Implementation, per capita private final consumption expenditure (PFCE) increased by 6.8% in 2025-26. In 2023-24, its growth was 4.8%. Sitharaman said that the government constantly monitors the price situation in the country. Financial, administrative and supply-related measures are taken to protect people’s purchasing power according to changing economic circumstances. She said that these measures have special focus on low and middle-income families.