Speech of the Hon’ble Finance Minister on the occasion of the Foundation Stone laying of Bank Note Paper Line at SPM, Hoshangabad today I am happy to be here on this occasion in the city of Hoshangabad, which is located on the south bank of holy river Narmada.

Press Information Bureau

Government of India

Ministry of Finance

17-December-2011 17:40 IST

At the outset I would like to congratulate the management and employees of SPM, Hoshangabad on this occasion.

2. Security Printing and Minting Corporation Of India Limited (SPMCIL) was formed a company after corporatization of nine units (Four mints, two currency printing presses, two security printing presses and one security paper mill). These units were earlier functioning under the Currency & Coinage division of the Department of Economic Affairs, Ministry of Finance. This was based on the report of the Expenditure Reforms Commission followed by study by IFCI. The main goal of corporatization was to foster efficiency by speedy decision making and increasing the pace of modernization to have the state of art security products. The company was incorporated on 13.01.2006 and started functioning w.e.f. 10.02.2006 as wholly owned Corporation of the Government of India.

3. After Corporatization the Govt. employee were kept on deemed deputation. After the signing of the tripartite agreement called Memorandum of Settlement (MoS) between SPMCIL, Ministry of Finance and the Federation / Unions in the presence of the Chief Labour Commissioner (Central), during Sep, 2008, about 90% employee opted for the Corporation. As on 31.03.2011 there were about 13500 corporation optees and about 1400 Govt. optees. Out of the SPMCIL optees about 11,000 opted for pro-rata pension and the balance about 3000 had opted for combined pension. The Pension Trust, EPF Trust and GPF Trust etc., have been operationalized.

3. The performance of the corporation in terms of production, turnover, profitability and other financial and physical parameters has improved significantly over the last five years. The company has achieved most of the objectives of Corporatization in a short span of four years. SPMCIL has been granted Mini Ratna category-I status. I am informed that SPMCIL has returned about Rs. 1000 crore of loans of RBI & MoF and by this year end it is likely to be a zero debt company.

4. I have been told that SPMCIL is making coins and currency not only for India but also for other countries. The expertise developed by the company over the years may be further expanded to develop products for other countries and assume a leadership position in this area.

5. Transparency is key to innovation and business development. SPMCIL has been actively pursuing transparent business processes particularly in its procurement processes. To take forward the transparency in the organization SPMCIL Board has adopted a procurement manual based on the best practices in the Govt. of India. It is expected that, this will bring transparency, efficiency and equity in procurement of security sensitive items. I will further encourage SPMCIL Board to continue to move forward in bringing further transparent procedures in its business transactions to promote innovation in a technologically oriented organization.

6. In order to give thrust to modernizations and indigenization, SPMCIL has an investment plan of approx. Rs. 2500 Crore for the five years from 2009-10 to 2013-14. Company has carried out major modernizations of Mints by Introducing state of the art coining presses, coin blank manufacturing lines and finishing & packaging lines. As part of modernization of Currency Printing Presses, one line of Currency Printing machine at Bank Note Press, Dewas is under advanced stage of installation and commissioning. The new Bank Note Paper Line at SPM, Hoshangabad is part of this modernization.

7. Extensive thrust has been given to indigenization efforts in the production of raw materials for the bank notes. A joint venture company called Bank Note Paper Mill India Ltd. (BNPMIL) for the production of indigenous currency paper has been set up at Mysore with 50:50 equity participation by SPMCIL and Bhartiya Reserve Bank Note Mudran Private Limited (BRBNMPL), a subsidiary of RBI. This paper mill will have capacity to produce 12000 tonnes of currency paper annually. The planned currency paper production of JV Company combined with production at SPM, Hoshangabad will be able to produce about 21,000 MT of paper annually. This will meet about 90% of the currency paper requirements by 2014 end.

8. The requirement of specific type of inks used in currency printing is likely to be fully made by Bank Note Press, Dewas by upgrading the ink factory. The modernization of ink factory at Bank Note Press, Dewas is under process. Triple Roll Mills have been commissioned and some additional equipment’s are at planning stage. The production is planned to be ramped up by the year end. Various R&D projects have also been taken up simultaneously in the areas of banknote paper mill, currency printing and coins metallurgy.

9. India is a victim of injection of fake currency in our economy. There are indications that fake currency is being injected from some of our neighboring countries either as a source or as a route. We have made serious attempts to curb the circulation of fake currency by streamlining the enforcement mechanism at the centre as well as State level. The efforts have been to increase the risk factors for carriers of fake currency in India. We have to continue to focus in the enforcement to check the design of anti-national elements.

10. We have also taken a series of measures to strengthen the security features of Indian currencies. A committee of officials from DEA, RBI, BRBNMPL, SPMCIL and security agencies has been constituted under the Chairmanship of DG/Currency for short listing of the Security features through global competitive bidding. A Separate committee constituted by RBI is finalizing the new design of the next series of the Indian Bank Note. The generalized technical specifications for various broad category of security features have been approved by High Level Committee. The acquisition of security features is being done in the most transparent way.

Therefore, the efforts of the Govt. is to make security features of Indian currency so strong that it becomes highly difficult to fake. At the same time we are also ensuring that the enforcement mechanism acts as deterrence to those who are involved in the circulation of fake currency. It is expected that this two prong strategy of the Govt. to fight the menace of fake currency in India will yield substantial results in years to come.

11. The Security Paper Mill (SPM), Hoshangabad commenced production of Currency and Non-Judicial Stamp Papers during 1967. The Mill was established with the process know-how and technology provided by M/s Portals Ltd, United Kingdom. The Mill has four cylinder mould vat made watermark Bank Note (CWBN) paper machines along with finishing end, testing laboratory and facility for making mould covers. SPM, Hoshangabad also has effluent treatment plant. The Mill draws water from river Narmada. I am happy that the Mill is giving adequate attention to environmental issues, which are critical for a sustainable development.

12. I am informed that for increasing the capacity limited modernization was done during 1982 by providing additional stock preparation machinery. After modernization, the capacity of SPM, Hoshangabad was expected to be 5500 Metric Ton Per Annum (MT) but due to various constraints this capacity could never be achieved. Further, modernization of printing presses required changes in currency notes sheet sizes resulting in lower machine deckle utilization. This combined with necessity to incorporate new security features like windowed thread, fibers and paper taggant also reduced capacity. The present capacity of SPM, Hoshangabad is about 2800 MT. This is a lesson which we have to keep in mind that upgradation and modernization should be carried out by factoring in the various changes which are likely to occur in future. The futuristic planning can ensure that there is no obsolescence and under capacity utilization.

13. Efforts are being made to order to indigenize the requirement of currency paper as per the recommendations of the Committee on Indigenization, under the chairmanship of Dr. Baldev Raj, Director, Indira Gandhi Centre for Atomic Research. I am told that the procurement of one line costing about Rs. 489 crores (approx) is in process, which will further strengthen our indigenous capacity.

14. The Order for design, procurement, supply, installation and commissioning of CWBN paper line of 6000 MT has already been placed, at a cost of about Rs. 445 crores. The project is likely to be completed by October, 2013. The completion of the project will reduce our dependence on foreign supplier. This will also reduce the possibility of diversion of papers supplied by foreign supplier to other destinations for the purposes of generating fake currency. We have to take the drive of indigenization to a logical conclusion by becoming self reliant. Our long term goal should be to meet our domestic requirement related to currency and subsequently cater to the demand of the international market. Looking into the technological and scientific temperament of our younger generation, I am sure we can achieve it.

I again wish good luck to all the employees and staff members on this occasion.

DSM