If you thought that proxy war was all about masked men with AK-47s, then here comes the other variant. Beyond the suicide bombers, the economic terrorism through the proliferation of fake currency notes has the ability of not killing a few but the nation as a whole. An unabated supply of fake currency has the potential to increase the total money supply in an economy to such an extent that it can reduce the value of the currency.
Oversupply of money could lead to sky rocketting inflation to an extent where all the accrued gains could be wiped out in months. Fake currency production also has the ability to finance many anti-national activities through the hawala route. Realising its potential, Pakistan seemingly has continued its efforts to flood the market with counterfeit currencies.
A RBI report estimated that the amount of fake currency in circulation in India is around Rs. 1,767,510 in 2005-06! One wonders on the plans the Indian government has to handle such humongous figures.