Given inflationary conditions in India, withdrawing smalldenomination coins will only aggravate inflation in the economy. Consider this. If each one of the 1 billion Indians carries out an average of five transactions involving small change, it is rounded off to the nearest rupee. Assuming a minimum change of 20 paise per person for each transaction, this would amount to a loss of `1per person on five transactions every day. Add to this a loss of `500 crore owing to the rounding-off of amounts issued by bank cheques. So `1,000 crore is in hidden circulation, which will push up inflation by at least 5 percentage points. This can be avoided by reintroducing small-denomination coins irrespective of the cost, which is far lower than the inflation effect. - Abhay Ekbote, Hyderabad
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