With higher RBI orders this year, the government’s four mints located in Kolkata, Hyderabad, Mumbai and Noida, outside Delhi, that are being modernized at the cost of at least Rs150 crore and employ 5,000, are working overtime.
Problems galore
Meanwhile, the finance ministry continues to receive a bulk of the complaints about insufficient circulation of coins from states such as, Karnataka, Bihar and Maharashtra.
“We get complaints and we pass it onto Reserve Bank, which gives us the indent for the year’s requirement,” an official said, requesting anonymity. Some observers, including one person who works at a government mint but also didn’t want to be identified, say some of the shortage has been contributed by RBI’s decision to stop production for two years—between 2005 and 2006—as well as uneven distribution of coins within India.
“It’s a headache to manage an idle staff when there is no work,” a coin specialist at a regional mint, said. “We took orders to produce Thai baht for the government of Thailand when there was no order from RBI in those 18 months.”
An RBI spokeswoman insists there is no shortage of coins and points out that the task of distribution rests with banks. “We assess their (customers) requirements and arrange to meet those by giving them the desired quantities at regular intervals,” she wrote in an email to Mint.
“My sense is that there are pockets of places, which are facing shortages. The problem is more of distribution,” adds the finance ministry’s Mayaram.
According to RBI’s 2007-2008 annual report released in August, demand for coins picked up from October 2006 and continued through 2007-08. The total value of coins in circulation increased by 13.3% last year, up from 11.2% in 2006-07, it said.
This year, the 5.5 billion pieces that have been ordered include 2,500 million pieces of Re1 coins; 1,800 million pieces of Rs2 coins; 800 million pieces of Rs5 coins; and 400 million pieces of 50 paise coins.
Sporadic shortages
In July, the Federation of Jharkhand Chamber of Commerce, which has 2,000 companies as members, held a coin mela, or fair, to try and tide over an inadequate supply of coins.
It asked RBI’s regional office in Patna to distribute coins worth Rs2.5 lakh. The coins were taken up in just two days by some 800 buyers, said Manoj Naredi, its president.
Other small towns, such as Jamshedpur, Daltonganj, Dhanbad and Gumla, are also experiencing similar shortages, he said. “We have written to the RBI last month, but have not heard from them so far,” said Naredi. However, RBI general manager V. K. Vohra says that “there was a shortage a few months ago. Now, there’s no problem.”
Paucity of coins also appears to be acute in Rajkot, the southern business hub in Gujarat. “We have been fighting with banks to distribute coins,”said Deepak Suchde who runs a machine tools business and is a member of the Rajkot Chamber of Commerce and Industries.
After several requests in the past six months, the central bank made arrangements to distribute coins worth Rs17 lakh a week ago. An advertisement was placed in a local newspaper, and the response was overwhelming.