The Centre is expected to announce its first-ever coinage policy to optimise the cost of manufacturing and improve the design of Indian coins.
As a first step, the government has accounted for a five-fold increase in the next fiscal's budgetary provision to buy metals to make coins.
The allocation for 2004-05 has been pegged at Rs 141.30 crore (Rs 1.413 billion) against Rs 21.83 crore (Rs 218.3 million) stated in the revised estimates of the current fiscal.
In comparison, the provision for currency notes, security press and others, has increased marginally to Rs 90.56 crore (Rs 905.6 million) from the revised estimate of Rs 83.25 crore (Rs 832.5 million) this fiscal.
The policy, which is in the final stages of being drafted by the Reserve Bank of India and the finance ministry, aims to replace the existing coins by cheaper alloys like stainless steel.
For instance, owing to the appreciation in the value of metals, the Rs 2 coin currently in circulation has an intrinsic value of Rs 2.05.
The Rs 5 coin, which has an alloy of copper and nickel, is worth Rs 5.10 paise.
In the wake of the Telgi scam, both the ministry and RBI have also decided to introduce a Rs 10 coin in place of the existing currency note.
The Rs 10 note has the widest circulation among all local denominations, which make them more prone to mutilation.
For instance, torn notes from the new series, introduced last year, have already begun to return to RBI, even though an average note is supposed to continue for at least one and a half years.
The introduction of coins in its place will also block counterfeit notes, because it will also include enhanced security features, which is another aspect of the new policy.
At the same time, Finance Minister Jaswant Singh has approached the National Institute of Design, Ahmedabad, to improve the design of each denomination of coin.
The finance minister's objective is to uphold India's historically strong tradition of coin-making.
