There’s a hole in the mint

These were potent coins, we were told. The one with the hole could buy a week’s groceries. The big one brought home enough rice to feed the family for a season. We were urged to compare them with their modern equivalents. How many bars of Cinthol soap would the despicable rupee note buy? How far would an eight-anna coin get you? In Eden, it was different. Money could be relied upon, despite the hole in its heart.

Like all Edens,however, we knew this one was a fantasy, a vanity that only the elderly could afford. This reliable currency was the product of India’s first contact with the global marketplace, when it was reduced to an appendage of a western military and industrial power. The reliability of the rupee was the wages of political and economic servitude. Somewhere in the myth was a big hole, as big as the one in the coin of the realm.

But today, the holed currency of empires past is beginning to look positively buoyant. The rupee is at forty-two to the dollar and still foundering. Number-crunchers prophesy that no matter how low it stoops, there will be room for it to stoop further. The governor of the Reserve Bank girds his loins and takes up fiscal instruments to do battle for the tattered honour of the rupee. And out there, sterling ranks of yen, Deutschmark, greenbacks, francs, guilders, the golden horde of the monetised age.

The hole in the rupee has become an expanding universe of uncertainty. What is left of thecoin of the realm is its milled edge, a quantity as fleeting, as insubstantial, as the diamond ring of a total solar eclipse. The government has no control over the forex markets. It has been reduced to a mere operator of mints. Mints with holes.

The nightmare has been in progress since the 1960s, when modern India was exposed to world market realities for the second time. In the ’70s there was the particular reality in question called the Vietnam War, which was intended to prevent a fantasy called the domino effect. In 1971, the massive expenses of the war had reduced the relation between the paper dollar and the gold reserves in Fort Knox to a myth. President Nixon closed the gold window, stopping convertibility, and then he reduced the gold content of the dollar.

The IMF system, which had kept forex rates constant for years, had pegged participating currencies to the dollar. In a very real domino effect, the era of fixed exchange rates ended and world currencies had to find their own level against eachother. International waters were pretty rough in the ’70s and the rupee, like most other currencies, bobbed and skipped violently. In 1976, for instance, it suffered revision five times. The era of the reliable rupee was truly over. Ever since, it has been under attack, and has always needed protection.

Yes, the rupee comes under attack. It goes into free fall like a skydiver with a torn ripcord. It suffers depression and oppression. It attempts to rally in response to Yashwant Sinha’s empty assurances. Poor, gullible, suffering rupee; it is a person, not a mere thing. That is why there is constant hectoring from the opposition benches whenever it comes under attack, as though the state had shamed itself by failing to protect a living, breathing citizen from the cruelty of a foreign power.

The stock markets also suffer periodically, but they are not deemed to require protection. Cold, mechanistic corrective measures suffice. Circuit-breakers are installed, controls are put in place. The investor certainlyneeds impassioned protection — he is human, after all — but not the market. It may be the dynamo of the economy but it is a mere thing, a mental construct, less that a person. Less than the very human rupee.

The opposition’s calls for protecting the rupee are reiterations of Cicero’s Civis Romanus sum. He who touches a Roman citizen touches the Roman state. He who touches the rupee touches you and me. It is a transgression of sovereignty beyond endurance.

It seems that we will have to live with this constant transgression. Despite the RBI governor’s mettle, he will have to go on signing that demeaning declaration on every rupee note. “I, Bimal Jalan,” he will write, “do solemnly promise to pay the bearer a sum that can no longer be expressed even in terms of a five-cent piece, but only in individual pennies and fractions thereof.”

But what of it? Other nations have learned to live with the foreign devil. In Italy, on a given day, the value of the lira is directly proportional to the number ofAmerican tourists deplaning at Rome’s Fiumicio Airport. If the devils take in Venice as well, it could mean another two percentage points. In Noriega’s Panama, the subversive citizenry would tear a dollar bill in half and get two dollars, then tear them again and get four. And then the spoilsport foreign devils abducted Noriega and the fun ended.

According to the shamans in the Finance Ministry, the ones charged with the job of obfuscating all Budget documents, a weak rupee will make India strong. Foreign investors will come in droves to get more bang for their buck. Exporters will flourish on fatter margins. Cheap resources will make India more competitive’, to use a term that has assumed quasi-religious proportions. To the unschooled mind, however, it looks like the white man is ganging up with the exporter next door to buy my labour and yours at cotton-picking rates.

The unschooled mind comes up with all sorts of ridiculous ideas. Such as the implications for decision-making of the rupee coin beingeaten away from within. I, personally, can no longer differentiate between heads and tails. Can the Finance Minister, or the shamans on his rapidly depreciating payroll? Or the people running his mints full of holes? Should a national commission not be set up to revamp the decision-making methodology of the government? Is anyone out there even listening? I’d like to think so. Because my money, and my options, are running out.