Question

Why is Indian currency regarded a fiat money?

Answer 1

Indian currency (the rupee) is regarded as fiat money because its notes and coins are issued and declared legal tender by the government/Reserve Bank of India rather than being backed by a commodity (like gold); modern rupee notes are inconvertible and have only a small intrinsic value, so their worth depends on the government's decree and public confidence rather than on convertibility to a physical commodity.