Indians’ bulgy pockets

In Kolkata there are coin suppliers in every market. Early morning when the markets open, these people make rounds of fish, vegetable and fruit stalls and sell coins at a margin.

Often they will supply coins worth Rs.50 and charge 4% as commission, that increases at times when the supply ‘dries up’ for reasons such as the coins being melted to make shaving blades.

Supplying coins is a lucrative early morning business for some like dropping newspapers or milk pouches at homes. The return is not bad, but now there may be more reasons to cheer.

The Reserve Bank of India (RBI) has recently announced plans to unleash Rs.10 coins before Diwali. Global tenders are to be invited soon for making 300 million pieces of Rs.10 coins worth Rs.300 crore ($75 million).

RBI’s action comes because smaller coins are fast getting out of circulation. This perhaps means if people start using higher denomination coins more, then the pressure on the smaller coins may become less. It though doesn’t happen like that on ground.

Popularity of smaller coins never really ebbs in Kolkata – perhaps the sole exception among the major metros. The reason according to me is the cheap cost of public conveyance that is often less than Rs.10. This is where I think the bulk of expenses occur.

Public buses and auto-drivers have to perforce carry small change, for otherwise if the passengers don’t have small coins they may not pay the fares. The same goes for small shops as well.

How will the tenner coin be? As per ET Jan 15 report, the Rs.10 coin will be 7.71 gm bimetallic – cupro-nickel or alloy of copper and nickel – composite with the rim made of aluminum, copper, and nickel. Apparently, only foreign makers have the know-how to make such coins.

The government does have an eye on depleting stock of Re.1 and Rs.2 coins. So, in addition to Rs.10 coins, 2,000 million of Rs.2 and 800 million of Re.1 will also be made. Budget for these two combined: Rs.500 crore.

Incidentally, contrary to popular take, coins of 5 paise, 10 paise, and 25 paise have not been discontinued by RBI. They are however no longer used. A near similar fate hangs for 50 paise coin, which still finds use in Kolkata, but very minimal in other metros.

Remember them..? [Image courtesy]