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Asian Tribune is published by E-LANKA MEDIA(PVT)Ltd. Vol. 20 No. 101

Short changed coins

By Tushar Charan - Syndicate Features

For many the first unpleasant encounter of the day starts at the milk booth when the man at the booth demands that you tender the exact amount for your purchase because he has no coins (change). A little later the scene is perhaps repeated at the vegetable market and the grocers. The coin shortage that Delhi and presumably many other towns and cities have been facing for several weeks now shows no sign of ending. Maybe, it will never end since most Indians are supposed to be playing with mega bucks!

Coin shortage is one of those epidemics that hit India from time to time, perhaps more frequently in the last decade. It has—right under the nose of the authorities--given rise to a sort of parallel currency system in which enterprising vendors and shopkeepers have started issuing their own ‘currency’ in the shape of paper slips of various ‘denominations’. It has also revived the ancient barter system when the seller hands you a toffee or some such thing in lieu of the change.

But there is a difference between the two systems. Whereas the paper ‘currency’, though unauthorised and illegal, is redeemed by the issuing party, the extra goods forced on you cannot be exchanged for anything else. It only makes the statistics about sale of consumer goods in India more impressive.

With the media and the government appearing to be keen to focus on the rising middle class that they say is overflowing with bulging wallets it is hardly surprising that the problem of coin shortage has barely caught public attention. After all the extent of loss a person suffers in the course of a day would barely be touching double digits. Not even peanuts for the new rich class of Indians! However, statisticians can work this figure up to show that taken collectively it amounts to a daily loss running into millions of rupees—relating that figure to GDP will be more impressive.

There is no word from the government about the reasons behind the coin shortage or about action being taken to end it soon. Usually the coin shortage occurs when the price of the metal or the alloy used in a coin exceeds the value printed on it. Old timers will recall the days when one rupee coin in India was made of silver with the face of the British monarch embossed on one side. In a testimony to the great ‘secular’ values of the country that silver coin commemorating a reigning or deceased British monarch was also the object of worship in many a Hindu ritual. The silver coin made its exit when the price of that metal started to climb up fast.

The silence of the government and the Reserve Bank of India about the current coin shortage have only activated the rumour mills. One story heard particularly in the eastern part of the country is that the Indian coins are very much in demand in Bangladesh and parts of West Bengal where the enterprising ones first melt them and then convert them into various goods, ranging from blades to ornaments and statues of gods and goddesses.

It is said that a one-rupee coin can ‘yield’ at least five blades. If the average price of those blades is Rs 2, it means that a one-rupee coin after it is melted and shaped into another commodity actually begets Rs 10 in the market. An ornament or a statue of a god or goddess made out of melted coin perhaps sells for more.

The Border Security Force is reportedly aware that a lot of Indian coins of smaller denomination are regularly smuggled into Bangladesh. There is an ingenuous way of smuggling the coins. They are packed in small plastic bags and then put in sacks of broken stones that are legally sent (exported) to Bangladesh. The small plastic packets stuffed in the interior of a bag of broken stones, it is believed, prevents the detection by the dated metal detectors that the BSF uses at the border. But to be fair to the BSF it is virtually impossible to effectively check the smuggling of coins across a porous border (over 4000 km) and passing through a variety of terrain.

The coin shortage has, however, a positive aspect. Quite a few (unemployed?) people can be seen everyday at the RBI office standing in a line for procuring change (though limited) that the RBI offers ( of course, against payment in currency notes) without asking any questions. The more knowledgeable say that many in the queue are ‘regulars’—call them agents or whatever---who sell coins to the more needy at a premium.

It must be the more desperate ones who buy the coins from the ‘agents’. The great majority of shopkeepers and vendors do not seem to patronise them because the ‘aam admi’ continues to be short-changed everyday.

When it comes to small matters like coin shortage and soiled currency notes, the RBI clearly doe not bother about the ‘aam admi’; nor do the other banks. It has winked for years over the disappearance of 50 paisa coins, although to the best of one’s knowledge it has not been officially taken out of circulation. Anything that costs an amount with a 50 P component is rounded off to the next rupee. In fact, the shopkeepers have unilaterally decided that 50 P is not a legal tender. As for the soiled notes, a bank would pass them on to you in a wad of currency notes when you withdraw money but would never accept ‘dirty’ or ‘damaged’ notes.

The fate of the 25 P coin, officially not withdrawn from circulation either, is worse. One talks here from personal experience. The RBI counter doling out change and exchanging soiled notes refused to accept a small cache of 25 P coins that one had unexpectedly recovered from a piggy bank that belonged to children long grown up. That the 25 P coin is till a legal tender was evident when an ‘agent’ volunteered to buy the treasure trove of 25 coins worth a little over Rs 30--for a commission, of course. That should also be a clinching proof that the RBI thinks the ‘aam admi’ should ‘bank’ on ‘agents’!

- Syndicate Features -

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