The Reserve Bank for long has been planning to launch plastic currency note after field trials. In February 2014, the BJP government had informed the Parliament that one billion plastic notes of Rs 10 denomination will be introduced in a field trial in five cities.
"Approval for procurement of plastic substrate and printing of bank notes of Rs 10 denomination on plastic banknote substrates has been conveyed to the RBI," Mr Meghwal said.
Substrate denotes the underlying substance or layer on which currency is printed.
The minister said the government had decided to conduct field trials at five locations of the country with plastic banknotes, which are expected to last longer than current cotton substrate-based banknotes. Kochi, Mysore, Jaipur, Shimla and Bhubaneswar are the five cities where the plastic notes would be introduced in a field trial.
Over the last few years, the cost of currency production has been rising in India. According to the RBI, the expenditure was Rs 2,376 crore in 2010-11, Rs 2,736 crore in 2011-12 and Rs 2,872 crore in 2012-13.
Plastic notes are difficult to imitate and have an average life span of about five years. Also, plastic currency notes are cleaner than paper ones. Such notes were first introduced in Australia to safeguard against counterfeiting.