Even as RBI boss Shaktikanta Das denies the need for printing new notes to save our pandemic-stricken economy, we go behind the scenes to weigh the pros and cons.
Amid demands from several sections that India needs to print cash to kick-start an economy battered by the COVID-19 second wave, and for protection of jobs in the affected sectors, the Reserve Bank of India has denied any such plans.
“… the borrowing requirements of both states and the Centre had been handled very successfully last year,” RBI Governor Shaktikanta Das was quoted as saying in a report by The Hindu.
What is Money Printing?
The government asks the RBI to print new currency for new bonds that the government places with the RBI. The government can spend this new cash to stabilise the economy by investing and spending in building infrastructure or giving hard cash to the poor, who can then spend thus boosting the failing economy.