Is Coins that were exchanged at times of continuous inflation, lost their purchasing Power? We present a Coin, and in exchange we get something in return. In major stores, franchise stores thanks to the glare of Globalization sweeping Indian economy, like never before, the bill amount in paisa is rounded off. If the bill comes to less than 50 paisa, it is omitted, and if it is more than 50 paise, it is rounded off to the next Rupee. Nobody complains.
The other day, an Old man came to my door seeking some charity. Today, nobody will accept anything less than Rs 10/- for any kind of philanthropy. The so-called Civic Society, if they are collecting money for a good cause or no cause, they would like atleast Rs 50/-. Rs 100/- would be better.
The aluminum coins of 5 paise, ten paise and twenty paise will disappear and will become a non legal tender from June 30, 2011. Metal coins of 10 paise and 25 paise also will cease to hold value. They will go to some Numismatist who may keep it as a Vestige.
There was Re 1/- issued by the Secretary, Finance, Govt of India. Today, it has disappeared. Rs 2/- was also in circulation. It is rarely seen. The difference between Rs 1/- and Rs 2/- was the first variety was issued by GoI, while Rs 2/- was issued by the Reserve Bank of India against security back-up.
With the obituary to these small Coins, 50 paise coin will be the smallest coin that will have validity. All the other smaller denomination coins will lose its parity in terms of purchasing power.
Whenever we take about the value of Rupee, we say that the Rupee is equivalent to 20 paise or 30 paise etc. Now, with these small coins going to antiquity, the value of the Rupee against its purchasing power will be compared to what. Today Rs 45/- is equal to a Dollar. They say that Rupee has become stronger to the Dollar. When the Rupee: Dollar parity goes down in Rupees, we say Dollar has improved in its value. Exporters will cry hoarse, if more Rupees will be equal to a $. Some time ago, there was strong rumours that Rs 1,000/- will be demonetized. This would facilitate money coming into the Open.
Bank Chiefs always say there is enough liquidity in the system. Only sometimes, there is movement of money. If you go to semi urban banks, they will say that they have no currency to pay. Some ATMs will not give you money, but will say, Transaction closed. And the money you pressed will be debited to your account. You will have harrowing time to get a reversal of the wrong debit. No body would say for want of a 10 paise coin, one’s battle was lost.
Good bye small paises!!!
