where did the 25paise go

A couple of days ago, there was news that the price of milk is going up by Rs 2/- or Rs 4/-.
The same morning, I was at a fast food joint (Darshini) to have breakfast. At the counter, I started a casual chat with the cashier on what would be the result of price rise on the price of coffee. He told me that there will definitely be an increase in the price of coffee by atleast Re 1/-.

Hmmm, that made me think. Using my logical brain (hehe), I continued the conversation and put forth this argument. He would atleast make 25-30 glasses of coffee with 1 litre of milk, which means that his overhead is about 10 to 20 paise per glass, but he was going to increase the price by Re 1/- resulting him in an extra profit of 80 paise per glass. The price rise announced by the Karnataka Milk Federation (KMF) is a blessing in disguise for these guys. When I asked him why they couldn't absorb the extra cost of 10-20 paise themselves(as they were already making a huge profit on their sale), he replied, 'why should we'. When I complained that it was not right to raise the price that drastically, he asked he one question, for which I didn't have an answer. He aked me that if he increased the price only by 25 paise, but where the hell would he get the change from? People would only pay him a complete rupee and expect their 75 paise change back.

That gave raise to this blog. Where did the 25 paise and 50 paises go? why did the govt. stop minting these coins? I am not an economist nor a financial guru, and hence I am still looking for answers. Can someone explain to me, how and when does Govt (RBI or whoever) decide to decommission currency denominations?

maya architects

These were the guys who built my house. Visit the project section on their website to see some wonderful work they have done

http://www.mayaarchitects.com/