Keep The Change- The Story Of The Disappearing Coins

Posted on June 3, 2012 in Business and Economy

By Nikhil Borker:

At a time when the country is under a severe financial crunch and the rupee is resting at all- time low levels, following the “keep the change” policy is definitely not the wisest idea for the common man. However, the irony is that we are forced to follow it whether we like it or not. With the extinction of the ‘chavanni’ and the ‘atthani’ and the virtually weightless coins in circulation these days, the demise of coinage in India looks imminent.

Isn’t it embarrassing when you are flaunting all the red and green in your wallet but don’t have any silver to buy a cup of tea. This is a minor but highly irksome problem faced by all of us almost every day. It is frustrating when the shopkeeper, with his smarmy smile, hands you a few candies. You are left with no choice but to leave with a disgruntled face. It is disheartening that India has the brightest minds in the worlds, still, as consumers we repeatedly prove that we are fools. The perfect example is the ’99 phenomenon’. Don’t we get excited when we see hoardings showing something being sold for 99 or 999? Yes, we do! And may go on to buy it later even when we know that we are not going to get the extra rupee back. Suppose a company sells 1, 00,000 goods in a month, it will make a profit of a lac at your expense. This has been a recipe for profit-making over the past ten years.

Why have we been suddenly struck by this situation? In the last few years two devils have tormented the country- corruption and inflation. These are the primary causes for reduced circulation of coinage. Corruption increases the amount of black money in the economy. This results in an increase in the ratio of higher to lower denominations. Thus, there is a relative decrease in coinage. Inflation leads to goods becoming more expensive. This implies that even the price levels of the goods that were earlier costing the bare minimum (like a matchstick) have increased. This is a clear indication of the rupee getting devalued. This is the macro side of the issue.

Just blaming the government won’t solve the problem. Now you would argue what can we do? I would say that it is only we the youth who can bring about a change. A foundation stone is required for the construction of any building. In the same manner we need to take the starting step if we are to save our currency. The most basic step could be to not give up any ground when it comes to rendering of balance. Try to amass as many coins as possible and always keep them with you for transactions. This will disseminate to others around you about the fact that coinage is an integral part of any economy. It’s still not too late. Start today so that you don’t have to lament tomorrow.