The power of one

The terms coined are Bata Pricing or Formula 99 - selling a product at Re 1 less than the psychological barrier. So, a pair of shoes is usually priced at Rs 1,999, not Rs 2,000. This successful marketing strategy works on two counts. One, because we read from left to right, the first digit resonates the most. Second, since most customers have a mental price band, even a juggling of Re 1 leads to a degree of comfort while buying. That takes care of the power of one. But just what accounts for the return of the Re 1 currency note after 20 years when the value is more in its antiquity, not real worth? Released at a temple in Rajasthan, the note bears the signature of the Finance Secretary, not the RBI Governor.

The printing of the Re 1 note was stopped in 1994 due to higher cost and a year later, coins replaced Rs 2 and Rs 5 notes too. The reasons for reprinting Re 1 notes could be shortage of coins and the rising incidence of melting of coins, since it is more valuable as metal content than as a means of exchange. Experts point to how lower-level coins have a way of demonitising themselves because of inflation. So, though more durable than notes, coins tend to disappear because it becomes more profitable to melt them. Also, since almost nothing can be bought for Re 1, stashing coins is seen as too much of an effort and is avoided.

Will the public buy the logic? The instant reaction to the government move is a smirk at what on the face of it amounts to nothing. Why not first end the confusion between Re 1 and Rs 2 coins, at times even Rs 5, some ask. But since Re 1 is the basic unit of currency, let's not discount some worthiness. Imagine the feeling of possessing wads of crisp notes, so what if the number on each is 1. And counting your blessings in every shagun envelope, with an extra Re 1.