Disclaimer & Affiliate disclosure: The information provided on this post is for general informational purposes only and should not be considered financial or legal advice. Always consult with a financial advisor or attorney before making any financial decisions. Some of the links in this post are affiliate links, meaning, at no additional cost to you, we will earn a commission if you click through and make a purchase.
The gap between the face value of money and the cost of producing it is known as seigniorage.
When the money a government generates is worth more than it costs to produce, it is considered positive revenue.
Seigniorage is a way for governments to earn revenue without having to collect taxes.
Coins are more expensive to produce than paper currency due to metal prices and manufacturing costs.
India suffered a seigniorage loss in FY 2016-17 as a result of demonetization, since over 90% of notes had to be reprinted.
The cost of printing climbed to Rs 7965 crore in that year, up from Rs 3421 crore the previous year.