Deepak and others on RHS There were still many parts of country where 25p was still relevent. The problem is foreign educated elitist bureaucracy and never having to count politicians that rules this country from center is myopic at minimum.
By
Ravindra Sharma, Managing Consultant, CHEF-India
| 07 20 2011 05:36:24 +0000
Stopping the lesser denominations will create a negative impact that there is no value for the same which will end up in Price hikes even for small items. The main fact is Prices are increasing and living expenses are also increasing but our earnings are not increasing proportionate to this.. What could be the major factor for this
By
Jomy Luke Xavier, SYSTEM ANALYST, UAEEXCHANGE & FINANCIAL SERVICES LTD
| 07 19 2011 12:27:43 +0000
I understand that the topic title and the arguments are confusing. I have no qualms in stoppage of small denomination coins that have lost its presence in day today money transactions in its physical form due to shrinkage of its value and cost of production became higher than its money value. What I am really interested to know is views of knowledgeable ones about the futility of continuing the small fractional coins of assumed values that cannot be associated independently by itself individually to anything material except to use in theoretical calculations which will have be rounded of to the nearest "half rupee" in the end. . According to me it would be better to rename new 50p coins as "One" Paisa so that here after One rupee will be equal to two paise for all practical purposes. Also it will be worthwhile to permanently peg value of rupee to value of gold such as "one rupee" always remain equal to cost "one milligram" of gold.
By
Abraham Paul, Senior Telecom Consultant, FCOMNET- Future Groups
| 07 06 2011 10:34:46 +0000
I5 is against fundamental economic theory on currency to discard smaller version of coins. This is due to the ignorance on how money circulated and how 'values' are ascertained. In valuing a product usually a mansecond of work by any laborer is provided 1/8th of a cent which ultimately leads to the price of the product. Our wages were so low for 50 years of independence since we didn't fix our wage levels on any economic fundamentals like this. This random application of value pilfered everywhere and nobody knows whether price of products we consume is properly valued. Moreover we don't teach 'finance' as a modern science as taught abroad in free market countries here in India. We still follow the old 'accounting finance' instead of 'economic finance' which can only fix the value problems.
By
Mathew Cherian, Research Associate/Analyst, Western Michigan University
| 07 03 2011 18:35:05 +0000
@ Kasturirangan & others. Based on the arguments on the other side, it would be justified to stop printing coins and rupee notes of value below Rs. 5 soon as availability and usage of coins below Rs. 5 is becoming less and less. Even Re. 5 notes are becoming scarce. I agree with these views. What I suggest is relation between the lowest denomination in vouge with its next high value currency should be re-fixed based on its fractional value to avoid accounting problems.
By
Abraham Paul, Senior Telecom Consultant, FCOMNET- Future Groups
| 07 02 2011 09:46:50 +0000
Will it not be problematic to continue usage of fictitious money of fractional value in current paisa level without its real existence in the system? May not be a problem considering that in Indonesia, rupee notes are not in circulation and 10000 rupee notes are being handled as basic currency. However, it is necessary to round off values less than 50 paise downwards to the rupee below ignoring the fraction amount and values above 50 paise upwards to next rupee adding remaining fraction to it. On accumulating accounts, this can result in problems of reconciliation of accounts that can become bothersome like keeping a separate account for the roded off amount so as to tally the account. For example, will it not impact the share market transactions if change in value of share prices to be done in steps of 50 paise, especially for penny stocks and other low value stocks transacted in huge quantity. As cost of production of low value coins are much more than its face value, doing away with it is justifiable, especially when the low value coins are not being used. Making 50p the minimum value coin in effect will invariably become necessary to revise the relation between rupee and 'paise' as 1 rupee = 2 paise so that the current half rupee will become 1 paisa and printing all new coins of half rupee value in future as 1 paisa coins. Considering the above, at the best Govt. should have limited the withdrawal of coins of value less than 10 paise only for the time being. Then the revised fractional relation of Rupee and paise could have been made as 1 Re = 10 paise making the value of 1 paise equal to current 10 paise in order to limit is impact in various ways.
By
Abraham Paul, Senior Telecom Consultant, FCOMNET- Future Groups
| 07 02 2011 09:34:59 +0000
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Hey Mr. Abraham Paul, "Also it will be worthwhile to permanently peg value of rupee to value of gold such as "one rupee" always remain equal to cost "one milligram" of gold." In olden days , we pegged value to Gold. Because, most of the time, the deal was on Barter method (Exchange of Goods). Currency equated to , say, 1 gram Gold then, accordingly, their commodities were exchanged . But , presently, Rupee is pegged to Dollar($). It changes , on day to day, depending on the market value prevailing. So , we moved away from the Old to different set-up. Now, as you say, suppose, if we peg 50p = 1Rs then, as you see, a commodity costing Rs12.50, will be Rs25 & a thing of Rs50 will be Rs100 and so on. Now, the pricing can be controlled by not using 50p. But, when we look at International currency 1$= say , 50Rs then an item priced at $25= 1250Rs but, by pegging to 50p=1Rs, it will be 2500Rs. Thus, by changing it, either the currency value goes down or the pegged currency value increases. That is to say, India's Foreign Currency Reserve will have different connotation. Just by abolishing the denomination of lower coins , we do not face such difficulties. But, we can prevent the wastage as I mentioned. It is one way of economical measure.
By
KALIYAMOORTHY , Oil & Gas Area Coordinator, Undisclosed
| 07 06 2011 12:26:56 +0000
Due to the inflation, the purchasing power of the rupee has gone down so much that nothing is available for 50p and less. And it is much uneconomical to produce these coins. So discarding this makes sense. I have seen 1p, 2p, 3p, 5p and 10p and 20p coins discarded. And people have sold them by weight even then. This is a residual factor which cannot be avoided.
By
Raju V P, Senior Manager, an International Bank
| 07 05 2011 20:46:43 +0000
Deepak I will slightly disagree with you the value as such has gone down and minting cost and distribution cost do not justify these coins. anything less than 50 paise is rounded off and anything above 50 paise is rounded off to next rupee.
By
Rathin Deb, Freelance Retail Consultant
| 07 05 2011 06:06:01 +0000
Deepak I will slightly disagree with you the value as such has gone down and minting cost and distribution cost do not justify these coins. anything less than 50 paise is rounded off and anything above 50 paise is rounded off to next rupee.
By
Rathin Deb, Freelance Retail Consultant
| 07 05 2011 05:25:49 +0000
Now a days printing / minting coins are expensive. Its either from local mint or abroad. However, the price of metal is keeping a rising-trend since its invention.Whatever the face value we give & the metal value outweighs it. Thats to say that, mere use of it as a metal will bring in more money than its actual value. On such occasion, it is wise to stop minting money & control the markets' prices of commodities so that this waste of money is avoided. Also, we have to consider our adjacent countries like PAK,Bangladesh, Nepal, SriLanka etc. where these metal may fetch more money than its actual value.People tend to accumulate these coins & smuggle it for better business there. This is an obvious waste of money & a loss of exchequer to India. Moreover, we find even, if you pay an alms of Rs one, the guys turn their face. We have given up paise such as 1,5,10,20,25 etc. I do not think that there is any problem in using higher denominations. For few days may be a problem, after sometime we will be used to it.
By
KALIYAMOORTHY , Oil & Gas Area Coordinator, Undisclosed
| 07 03 2011 14:52:53 +0000
Yes it is perfectly OK. We we go out for anything noting comes below Rs. 1. .25 paise or even .50 paise has no value. The same thing applies to the Salary of any employee and it should be increased based on increase in expenditure and should be enhanced.
By
anuradha , Education Coordinator, A to Z Technologies
| 07 03 2011 05:46:16 +0000
Yes. The value of currency lies in its purchasing power ; when a currency denomination will not purchase anything worthwhile , then it is time it was removed from circulation. As it stands , the lower denomination coins are used only by the poor class ; when we purchase anything in bigger shops , and the shopkeeper does not return the small change , we rarely protest. So also when we travel by bus. It is not so with poor people , who still value 50 paise. But the Indian market which caters only to the middle and rich classes , has reduced the value of the 25 paise coin to zero , which means there is not even a toffee ( the cheapest item for a poor child ) or a pan sachet ( the cheapest item for a poor man ) which can be bought with this denomination. Time then to eliminate it.
By
K. NARAYAN, None, None
| 07 02 2011 08:30:34 +0000
The fractions may continue, round the value to the next nearest rupee value. I want to share an incident here. This was happened sometime back during 2002 or 2003 I believe. I along with my father-in-law was waiting for train at railway station. One beggar approached my father-in-law and begged. My father-in-law offered him two 50 coins, but the beggar reluctant to accept them when the coins were put in his hands, he just thrown away them on the floor and left the place. See even beggar has find no value in this denomination. Lol. I believe, there is no point in continue to mint these coins below one rupee.
By
Srinivas suravajhala, Asst. Manager.
| 07 02 2011 07:29:33 +0000
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