- Rohan Pai, PGHR 2010-12
Indian currency coins have known for going out of fashion and out of circulation regularly. During independence we had the Rupee coin, Half Rupee coin, Quarter Rupee coin, Two Anna, One Anna, Half Anna and One Pice.
It was in 1957 that we moved to a metric coinage system and the Rupee was divided into 100 Paisa instead of 16 Annas or 64 Pice. Along with the existing coins, we then had One Naya Paisa, Two Naye Paise, Five Naye Paise, Ten Naye Paise, Twenty-Five Naye Paise ( in place of Quarter Rupee coin ), Fifty Naye Paise ( in place of Half Rupee coin ). To signify the change to public, the Paisa was termed ‘Naya Paisa’ (New Paisa) and the ‘Naya’ term continued to be printed on the coins for a decade. This was the age when our grandparents bought most daily necessities for less than a Rupee.
With commodity prices rising in the sixties, the Pice gradually started going out of fashion and ultimately out of circulation. In the coming decade the Anna faced the same fate.
The foreign exchange rates helps to decide which particular denominations of the currency should be minted more. For the existing denominations, when prices outgrow the face value of the coin, i.e even the cheapest of the products or items available in the market are priced greater than the face value of the coin, the coin starts getting redundant. As prices increase, the exchange of the particular coin becomes cumbersome because more of such coins are required to meet the increased price. Prices are adjusted in such a way that the need for this coin as transaction happens with the help of coin of higher denomination. People start avoiding or even rejecting the use of the coins and gradually it goes out of fashion and circulation.
Increase in metal prices have lead to a situation where minting costs for particular denomination is more that its face value. Instead of halting the production of coins of that denomination, there is an option of replacing that metal or alloy with cheaper alloys to reduce costs. In 1964, to counter the rising commodity and metal prices, the Aluminum version of paisa was introduced with One ( Rounded Square Shape ), Two ( Scalloped /Wavy edges ) , Three ( Hexagonal ), Five ( Rounded Square Shape ), Ten ( Scalloped /Wavy edges ) and Twenty ( Hexagonal ) Paise denominations. But the increasing prices and diminishing popularity saw the discontinuance of 1, 2 and 3 paise coins in the seventies. After a prolonged period in circulation, the Five Paise disappeared in the late 80’s.
In 1988, Stainless steel versions of 10, 25 and 50 paise (All Circular) came into being. In 1992, our current stainless steel version of One Rupee was first introduced. The 90’s also saw the introduction of Rs.2 (11 sided polygon) and Rs.5 coins (Circular).
The rising prices in 2000’s saw the decreasing popularity of the 10, 25 and recently 50 paise coins. The 10 paise coins have went out of circulation. The 25 paise coins are also heading towards the same direction. The denomination is no longer popular even for charity purposes. It won’t be long before all prices would be rounded to the nearest rupee making the 50 paise coin redundant.
Now the inflation seem to threaten the existence of the very integral unit of our currency system - The Rupee Coin. The question is how long will it take before we start finding the 2 Rupee coin or the 5 Rupee coin more convenient to use than the 1 Rupee coin. Or will we be able to maintain the prices of at least few commodities and services to levels that will ensure that the 1 Rupee coin would remain an integral part of our lives. We will be able to find the fate of the rupee coin in the years to come.