Like the British and the Indians, the Japanese drive on the left side of the road. However, they use 110V electricity like the Americans.

In Tokyo, they stand on the left side of the escalator but in Osaka, they stand on the right.

Japan has many idiosyncrasies that go unnoticed including the Japanese Yen, which is unique in many ways:

Unlike Britain, America, Sultanate of Oman or India, the Japanese Yen does not have a sub-unit. The British Pound has a hundred Pence, the American Dollar has a hundred Cents, the Omani Riyal has a thousand Baisa and the Indian Rupee has a hundred Paisa; but the Japanese Yen has only the Yen and no sub-units.

Majority of the world’s other currencies have smaller sub-units as part of their legal tender. There are a few developing and developed countries (e.g. Indonesia, South Korea, Norway etc.) that do not have sub-units in circulating currency. Though some of these countries may use sub-units for cheques and electronic transfers.

The Yen has been legal tender in Japan since 1871. In those days a hundred ‘Sen’ or a thousand ‘Rin’ were equivalent to one Yen. However, sometime in the mid 1950’s, the ‘Sen’ and the ‘Rin’ were taken out of circulation and Japan did away with a sub-unit in its currency. Today a Yen is a Yen and people yen for it; being the third most traded currency in the world.

In many ways, a country’s currency is its national heritage and pride. However, the Japanese being very pragmatic people and seeing the devaluation in the value of its sub-units, thought it prudent to demonetize the ‘Sen’ and ‘Rin’, notwithstanding the emotional attachment.

In the post-war era (mid-1950’s) moving away from the decimal accounting system of a sub-unit must have been challenging for Japan, as its economy was in shambles. It was also among the first few countries to move away from a metric sub-unit in its currency.

In contrast, India adopted the metric system of coinage in the mid-1950’s.

Since the introduction of the Paisa in the mid-1950’s its value has depreciated considerably. Today, apart from a candy or sweet, there is very little else that a 50 paisa coin can buy.

Most of the confectionery industry’s new product launches are at the INR 1 price point. Sales of the 50 Paisa candy portfolio are now below 20% in a leading Italian confectionary player in India.

In 2011 except for 50 Paisa, all other Paisa coins were stopped and demonetised.

Today the 50 Paisa coins have little relevance and acceptance among shrines and shopkeepers. Some anecdotes suggest that even the beggars do not accept Paisa coins.

When I reflect on the recent demonetization and the current devaluation of the rupee, I ask myself why the Paisa exists?

What use is there in having a monetary unit that cannot buy anything. The shortage of 50 Paisa coins causes more problems without any significant benefit to the economy.

In the 21st century, the concept of Paisa as a monetary sub-unit has little relevance and nearly zero purchasing power.

The recent devaluation of the rupee further strengthens the rationale to do away with Paisa as a monetary sub-unit.

Whether it is ‘Paisa ka kamaal’ or ‘Rupee ka khel’, time our politicians and economists focused wholeheartedly on shoring up the Rupee!

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