This story now
IN Desi ON 03 Nov, 2016
Have you ever pondered over the issue of burning a note? How can burning a 1000 rupee note make India rich or poor by a thousand rupee? Will it affect the GDP of our country? Think, think! Well, if you're unable to find out the answer, then read on further to know the consequences of burning a note.
NOTE: Your point of view may differ from mine. I would like to know your views too. So, please don't forget to share your thoughts in the comments section below.
Recommended story: Art of investing in Indian market with TriFid Research
It is clearly written over the note that: 'I promise to pay the bearer the sum of thousand rupees'.
Will you get your money back by the government of India?
The cost of making of a 1000 rupee note is Rs 3.17.
You can no longer claim your money back from the governor of RBI.
But governor is just an employee of the RBI.
So, basically burning a note by you has contributed to the GDP of India.
But there is a twist to the story.
Thus, India got richer by Rs 996.83 precisely.
It can be invested in governance, construction of roads, bridges and printing notes.
Well, it is illegal to burn currency in India as mentioned under the Central Government Act Section 489E in The Indian Penal Code, 1860.
The Government asks citizens after regular time intervals to replace their old notes with new ones from the bank. The government keeps a note of printed notes and thus can easily track if the notes collected are lesser than printed ones. So, the government prints extra notes and circulate them. It is up to the government to decide the utilization of notes.
Due to devaluation of currency, the amount will be lesser than Rs 996.83. So, it can't be said that the government will get rich by Rs 996.83.
If the old currency keeps circulating, then the government wouldn't be able to find out torn or burnt notes. Thus, no one will reap the benefits in case of burning a note. Instead of burning a note, you can directly donate your money to a government organization.
Share this information with your friends and family.
Please subscribe for more stories.
To access this content, confirm your age by signing up.