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Indian Paper Currency Act 1871 Pdf Download: The Challenges and Opportunities of the Government Paper Currency System



Indian Paper Currency Act 1871: A Historical Overview




The Indian Paper Currency Act 1871 was a landmark legislation that introduced paper money as a legal tender in British India. The act was passed by the British Parliament in response to the Indian famine of the 1870s, which caused a severe shortage of silver coins. The act authorized the Government of India to issue currency notes of various denominations, backed by gold and silver reserves. The act also established a Department of Paper Currency and a network of offices of issue and redemption across the country.


The Indian Paper Currency Act 1871 was a significant step in the evolution of the Indian monetary system, as it marked the beginning of a uniform currency for the whole of India. The act also had important implications for the Indian economy, as it facilitated trade, commerce, and taxation. However, the act also faced several challenges and criticisms, such as inflation, counterfeiting, depreciation, and political resistance. The act was amended several times over the years, until it was repealed by the Indian Coinage and Paper Currency Act 1893, which introduced a new system of coinage and paper currency based on the gold standard.




Indian Paper Currency Act 1871 Pdf Download



The Indian Paper Currency Act 1871 is an interesting topic for anyone who wants to learn more about the history of Indian money and finance. If you want to download a PDF copy of the original act, you can find it online at [^2^]. Alternatively, you can also read a detailed analysis of the act and its modifications in a book by India's Legislative Department, available at [^1^].


The Indian Paper Currency Act 1871 had a significant impact on the Indian monetary system and economy. The act aimed to create a uniform and stable currency for the whole of India, which was divided into different regions with different currencies and exchange rates. The act also sought to increase the supply of money and credit, which was needed to finance the growing trade and commerce in India. The act also enabled the Government of India to control the money supply and regulate the exchange rate, which was important for maintaining fiscal and monetary stability.


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However, the Indian Paper Currency Act 1871 also faced several challenges and criticisms from various quarters. One of the main challenges was the fluctuation of the silver price in the international market, which affected the value of the rupee. The act fixed the exchange rate of the rupee at 165 fine troy grains of silver, but this rate became unsustainable as silver depreciated in relation to gold and other currencies. This led to inflation, balance of payments problems, and loss of confidence in the rupee. Another challenge was the counterfeiting of currency notes, which undermined their credibility and security. The act also faced opposition from some Indian princes and merchants, who preferred to use their own coins or foreign currencies. Some Indians also viewed the act as a symbol of British imperialism and exploitation, as it gave the British government more power over the Indian economy.


The Indian Paper Currency Act 1871 was amended several times over the years to address some of these issues and adapt to changing circumstances. Some of the key changes were: raising the ceiling for holdings of Indian government securities by the Paper Currency Department; allowing currency notes to be issued in exchange for gold as well as silver; introducing smaller denominations of currency notes; establishing a gold standard for the rupee; creating a separate issue department and a separate banking department within the Paper Currency Department; and allowing currency notes to be legal tender in all parts of India. The act was finally repealed by the Indian Coinage and Paper Currency Act 1893, which introduced a new system of coinage and paper currency based on a gold standard.


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