Ambedkar’s Analysis of Indian Currency and Banking: A Historical and Economic Study

Abstract

B.R. Ambedkar’s contribution to the study of monetary and financial systems in India remains one of the most significant intellectual achievements in the country’s economic history. His pioneering work, The Problem of the Rupee: Its Origin and Its Solution, presented a comprehensive analysis of the Indian currency system from the Mughal era to the early 20th century. This paper reviews Ambedkar’s critical observations on the evolution of currency, the silver monometallic standard, the introduction of paper currency and the transition to the gold exchange standard under British rule. It highlights Ambedkar’s opposition to the gold exchange standard and his advocacy for a managed, inconvertible currency to ensure monetary stability. By examining historical developments, institutional practices and debates—including Ambedkar’s critique of Keynes—the paper underscores the continued relevance of his views in understanding currency depreciation, exchange rate fluctuations and the need for robust monetary governance. The analysis also reflects on how Ambedkar’s recommendations, such as tighter control over currency issuance and mechanisms for price stability, remain pertinent in today’s context of fiscal deficits and inflationary pressures.