Ministry of Finance30-March, 2007 16:18 IST
Decimal Coinage – a Fascinating History

Indian coinage went decimal on April 1, 1957, ten years after it gained Independence from the British. Though coins as units of monetary value have been in use for 500 years or so, India’s history of modern coinage is only about 200 years old. Its fascinating history that has some amusing aspects can be traced to the days of the East India Company, the precursor of the British Raj. Even after the British left after India’s independence in 1947, the country continued to follow the old non-decimal coinage. India finally went decimal in 1957.

Legislative work to facilitate switchover to the decimal system was put in motion some two years earlier – 1955.   The Indian Coinage Act was amended in September 1955 to embrace decimal system.  After the amended Act came into being, a circular issued by the Comptroller and Auditor-General of India, in April 1956, said: “Government accounting with effect from April 1, 1957 is to be maintained in terms of rupees and naye paise instead of rupees, annas and pies. All chalans in support of money tendered in payment of Government dues are, therefore, to be expressed in the new coinage. Similarly, all bills for withdrawals also are to be expressed in terms of rupees and naye paise.  The Act came into force on 1 April 1957 fifty years ago. The rupee remained unchanged in value and nomenclature. It, however, was now divided into 100 ‘paisa’ instead of 16 annas or 192 paise.

Birth of Decimal System

India became independent on 15 August 1947 and was left with a legacy of non-decimal coinage. One rupee was divided into 16 annas or 64 pice, and each anna was equal to 4 pice.  The Anna Series was introduced on 15th August 1950 and represented the first coinage of Republic India. The Lion Capital of the Ashoka Pillar replaced the King’s Portrait. A corn sheaf replaced the Tiger on the one Rupee coin. In some ways this symbolised a shift in focus to progress and prosperity. Indian motifs were incorporated on other coins. The monetary system was largely retained unchanged with one Rupee consisting of 16 Annas. In 1957, India shifted to the decimal system, but for a short period both decimal and non-decimal coins were in circulation. To distinguish between the two, the coins minted between 1957 and 1964 have the legend “Naya Paisa” (“new” paisa). The denominations in circulation were 1, 2, 5, 10, 20, 25, 50 paise and 1 rupee.

Though people are quite at ease with the decimal system today, they were not 50 years ago. Even after the switch over to the new system, for a few years both decimal and non-decimal coins were in circulation. There were hassles of conversion of the value of the old anna in terms of the new paise that was appropriately called naya paise. It led to prolonged confusion, especially among the masses. The rupee now comprised 100 naya paise. Till now, one rupee was divided into 64 quarter anna. The quarter anna came in copper coins of the size of today’s one rupee. It also came with an inner hole that made it possible to string 64 such coins together to make it a garland of coins worth one rupee. In later years the coin was used as a washer by innovative plumbers and mechanics for fixing nuts and bolts!  One quarter anna comprised 3 paise, the smallest denomination. Apart from one anna, there were coins for half anna, two anna, four anna, eight anna or half a rupee and one rupee. 

Consumers and Grocers Haggle

It was common during the early days of decimal change-over to see consumers haggle with the grocers, owners of eateries and restaurants and the general shops over the exact value of the anna in the new decimal naya paise.  For example, in the small towns and cities of southern Indian states, a limited meal was priced at four anna. Normally, in the decimal coinage, it should convert into 25 naya paise, as four anna was a quarter of a rupee, which is now 100 naya paise. But, for some strange reason the eateries priced it at 26 naya paise. The quarrel over one naya paise was quite understandable, as that would fetch a packet of peanuts worth rupees two today! Similarly, in most cinema halls, the front benches cost four anna a seat. Now it became 26 paise, again leading to much quibble at the ticket counter. The same bench seat cost 18 naye paise for afternoon shows, popularly known as “matinee” that often featured the best of Laurel & Hardy and Charlie Chaplin, the ultimate in entertainment for a whole generation till far away from the satellite TV era.

New Denomination

On 1 June 1964 the legend ‘Naya’ added to the paise was dropped. The year also saw the introduction of a new denomination - the 3 paise. In 1968 a 20 paise coin was minted. Both these coins however did not gain much popularity. The 1, 2 and 3 paise coins were phased out gradually in the 1970s. With commodity prices rising in the sixties, small denomination coins that were made of bronze, nickel-brass, cupro-nickel, and aluminum-bronze were gradually minted in aluminum. Over a period of time, cost benefit considerations led to the gradual discontinuance of 1, 2 and 3 paise coins in the seventies.

India also issued commemorative coins in various denominations, including those celebrating Mahatma Gandhi, Jawaharlal Nehru, Indira Gandhi, B. R. Ambedkar, Rajiv Gandhi, Dnyaneshwar, 1982-Asian Games, Sardar Vallabhbhai Patel, Subhash Chandra Bose, Sri Aurobindo, Chittaranjan Das, and Chhatrapati Shivaji. The denominations in circulation currently are 25 and 50 paise and 1, 2 and 5 rupee coins.

With commodity prices rising in the sixties, small denomination coins that were made of bronze, nickel-brass, cupro-nickel, and aluminum-bronze were gradually minted in aluminum. This change commenced with the introduction of the new hexagonal 3 paise coin. A twenty paise coin was introduced in 1968 but did not gain much popularity. Over a period of time, cost benefit considerations led to the gradual discontinuance of 1, 2 and 3 paise coins in the seventies; stainless steel coinage of 10, 25 and 50 paise was introduced in 1988 and of one rupee in 1992. The very considerable costs of managing note issues of Re 1, Rs 2, and Rs 5 led to the gradual coinisation of these denominations in the 1990s.

Puzzling Denominations

The fascinating history of Indian coinage since the early 18th century had several puzzling denominations. Whether it was coins or currency notes, the oddities happened at regular intervals. The intriguing denominations in the annals of coinage were 2-1/2 cash or dhuddu, 1/48 to rupee, 1/96 to rupee of the Madras Presidency. Mostly, the denominations in the three presidencies of Bengal, Bombay and Madras were two rupees, one, half, quarter and 1/8th rupees in silver.

The copper denominations were known as half anna, quarter anna, pice and cash. Though exact explanation was not found, Governor William Bentinck proposed the introduction of 20 cash, 10 cash and 5 cash, and the first was issued in 1803. The redesigned set issued again in 1807 included a new higher denomination viz. 40 cash. In the history of decimal system, this can be attributed as the beginning, though it did not have any relation to the calculation of one rupee.

India – The Pioneer

India has been one of the earliest issuers of coins in the world (circa 6th Century BC). The origin of the word “rupee” is found in the word rup or rupa, which means “silver” in many Indo-Aryan languages such as Hindi. The Sanskrit word rupyakam means coin of silver. The derivative word Rupaya was used to denote the coin introduced by Sher Shah Suri during his reign from 1540 to 1545 CE. The original Rupaya was a silver coin weighing 175 grains troy (about 11.34 grams).                                                                                                                         The history of banknotes also had many fancy denominations. The most amusing denomination of all the banknotes is the two rupees and eight annas currency note issued for the first time on January 2, 1918. This was equivalent to one dollar that time. It continued to be in circulation till January 1, 1926.

*Freelance Writer

Disclaimer: The views expressed by the author in this feature are entirely his own and not necessarily reflect the views of PIB.

(Release ID :26527)