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Which is the effect of fake currency on Indian economy?

Which is the effect of fake currency on Indian economy?

Counterfeit products across various sectors in India are causing over Rs 1 lakh crore every year to our economy and the progress to date is simply not good enough to fight this crime of the 21st century,” said Nakul Pasricha, President, ASPA.

Does fake money affect inflation?

Inflation realigns incentives as the number of notes in exchange for goods increases (each note has equal denomination): while the cost of counterfeit is fixed, each note has less value in an inflationary environment. Furthermore, the higher the inflation is, the lower is the value of a single note.

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Why is counterfeit money so hard?

Because everything from the paper to the ink to the printers required to reproduce a high quality counterfeit is nearly impossible to obtain either because of price or exclusive contracts on production of those materials.

What is the meaning of counterfeit goods?

Counterfeiting is the manufacture, import, export, distribution, and sale of consumer goods that are not genuine but are designed and branded to look identical to the authentic products in order to deceive consumers into believing that they are authentic.

How does counterfeiting affect businesses?

Besides negatively affecting brand reputation and costing millions in lost revenue, counterfeit goods also increase the costs of doing business, impact jobs, erode consumer confidence, inhibit business growth and result in lost productivity and investments, including foreign direct investment.

How do counterfeit products affect businesses?

Compromising long-term trust between businesses Distributors, retailers and other partners working with companies will often lose trust in legitimate businesses due to the actions of counterfeiters.

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How big of a problem is counterfeit money?

According to the United States Department of Treasury, an estimated $70 million in counterfeit bills are in circulation, or approximately 1 note in counterfeits for every 10,000 in genuine currency, with an upper bound of $200 million counterfeit, or 1 counterfeit per 4,000 genuine notes.

What are the difference between real and fake money?

Genuine currency paper has tiny red and blue fibers embedded throughout. Counterfeiters try to duplicate the fibers by printing them throughout the lines on the paper. On lesser quality fake bills, a counterfeit pen can reveal the paper of the bills to fraudulent .

How does counterfeit currency affect the economy?

Circulation of counterfeit currency can have the following adverse effects on the economy: Devaluation of Currency and Inflation As counterfeit money makes its way into the markets, suddenly there is more money in circulation than there should be.

What are the consequences of fake currency?

Especially, big businesses and industries of a nation are likely to incur huge amounts of losses. When the banks are informed about fake currency being involved in some significant business transactions, it is confiscated with immediate effect, but most of the time, the businesses do not get reimbursement for their money.

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How do people react to counterfeit money?

People tend to lose faith in the economy of their country and the money that they hold. So, in order to avoid any kind of encounter with counterfeit money, they may start making demands of their payments to be made in some other, more stable currency.

Why do fake goods depreciate in value?

Just like when the central bank prints money, fake goods depreciate the brand and depreciate the value of existing goods. This is because the increase in supply reduce the scarcity value of the good.