Monetizing India’s Past: Evolution of the Indian currency

The recent move by the Indian government to demonetize the existing 500 and 1000 rupee bank notes has brought the focus of an entire nation back to one of the most important aspects of human life — money. It has made even the lay observer on the street realise the important role played by this paper-based medium in day-to-day transactions with the rest of India’s 125-million-plus denizens. However, few Indians are aware that this is just one of the phases in India’s monetary system which harks back to a past of over two-and-half millennia. And that is not including a long period of a monetary Dark Age which began about 1.5 million years ago when the earliest humans came to inhabit the sub-continent surviving on foraging and hunting till the discovery of rudimentary farming about 8000 years ago. It was then that humans made their settlements in North-Western India and began a rudimentary barter based on mutual agreements.  

The Harappan civilisation  

This long period which hasn’t left any written traces soon gave rise to one of the most spectacular yet enigmatic periods in Indian history, the Indus Valley or Harappan Epoch which began about 5,500 years ago in North-West India centred on the banks of the Sindhu (Indus) and Saraswati Rivers. During this period, a complex monetary system based on fixed weights and quality goods heralded a one-and-half millennium of international trade with far away cities like Sumer in modern Iraq and ‘Dilmun’ (Bahrain) in Bronze-Age Persian Gulf. Some of the objects recovered from Harappan sites are believed to have been used as barter goods; these include gold, silver and semi-precious beads, pottery, bronze and terracotta statues, shell bangles and an enigmatic set of seals inscribed in the Indus Script. This period came to an end around 1300 BCE probably due to massive climate changes causing the drying of the Saraswati River.

When the cow was monetised

The next period in Indian history was the Vedic Period when the cow emerged as a medium of exchange between the upper classes. However, the cow proved to be an unsuitable medium due its lack of smaller units, inconvenient handling and perishable nature which led to the use of precious metals like gold and silver. Thus, we find numerous references to gold and silver as Hiranya initially for both, and then as Suvarna/Pith and Rajata; several ‘gold money’ units are also referred to, in the later Vedas, as Nishka, Shatamana, Chandra and Pada, though no Vedic period currency has been found till date. According to modern scholars, the Shatamana (lit. Hundred units) represents a money unit which was hundred times the weight of a seed called Ratti (Abrus precatorius) which became the basis for the Tola corresponding to 96 rattis. The Tola became the weight standard for Indian coins right from this early historic period till the British era.

India’s first state-certified coins

The post-Vedic period saw the rise of Iron Age kingdoms known as Janapadas (Jana ~ People Pada ~ Foot lit. Foot of the People) which were later absorbed into sixteen larger kingdoms termed as Solasa Mahajanapada in and around the fifth century BCE These Mahajanapadas were empowered to issue India’s first state-certified coinages in silver from diverse regions which stretched from ancient Gandhara (Qandahar, Afghanistan) in the North-West till Ashmaka-Kuntala (Deccan peninsula) in the South-east and Saurashtra (Kathiawad-Kutch) in the west till Anga/Vanga (ancient Bengal) in the east. The coins issued by them were essentially odd-shaped pieces of silver, cut in various polygonal shapes and ‘punched’ with unique emblems usually on one side only. Importantly, the coins in each local series corresponded to a definite weight range (usually multiples of the Ratti) keeping in view the precious nature of silver. Many accounts in Buddhist Jatakas, Sanskrit texts and Jaina Agamas mention the use of silver coins during the pre-Buddhist era. Panini, the fifth-century Sanskrit grammarian first used the term Rupya to describe ‘beautiful images’ on these coins. The later medieval denomination, Rupaiya was a corruption of Rupya and the modern Indian Rupee in turn originated from Rupaiya. Ancient India’s monetary system was thus maintained on these ‘Punch-marked’ coins for the next five hundred years including the Mauryan Empire era when a silver imperial coin weighing 32 rattis and called the Karshapana was innovated for this huge empire stretching from the Khyber Pass till the foothills of Karnataka. Interestingly, Karshapana later gave birth to the word, Kaasu in many South Indian languages meaning loose change, which in turn became Kaash, and later during the colonial era giving birth to the colloquial English word, cash!

The Alexander-Maurya connect 

Indian monetary system’s next big change came with the invasion of India by Alexander the Great in 326 BCE when Indians encountered the cutting-edge Greek technology of die-struck coins for the first time. Die striking involves the preparing of bronze dies engraved with the negative designs of both sides and striking them simultaneously on a coin blank. 

Alexander’s immediate successor, Seleucus Nikator continued the connection to India by marrying his daughter to a Mauryan royal. 

His successors, the Seleucids continued to maintain friendly relations with the Mauryans till Ashoka’s period. However, their local governors became independent in around 250 BCE establishing the Greek kingdom of Bactria. The Bactrian Greeks gradually forayed into India prompted by the fall of the Mauryan Empire in 180 BCE The Indo-Greek kingdom, as it was now called, engulfed large parts of Kabul-Gandhara where they issued a set of die-struck coins with life-like images of deities and rulers. 

The initial series used images of Greek deities but later coins had images of Indian deities as well. One of the earliest Indo-Greek coin types found at Ai-Khanum, an archaeological site in Afghanistan, had the first depiction of the divine brothers, Balarama and Vasudeva Krishna on either sides with Greek-Brahmi legends naming an Indo-Greek ruler, Agathocles. 

Thus, spurred by Greco-Roman technology, Indian kingdoms began to issue coins of the ‘die-struck’ type from the first century BCE with the Classical Age of die-struck Indian coins beginning in the first century CE under the Kushans who were inspired by Roman gold coins arriving on the Indian shores through Indo-Roman trade to issue the first gold coins in India with images of deities from Indian, Greek and Zoroastrian pantheon. The Kushana idiom was amplified by the Gupta dynasty in the fourth century as a number of Gupta rulers issued varieties of gold coins depicting the Gupta Emperors not only in martial activities like hunting lions/tigers, posing with weapons, etc, but also in leisurely activities like playing a Veena. These coins have Sanskrit legends written in the Brahmi script with reverse images of Lakshmi, Durga, Ganga, Garuda and Kartikeya.

Inspired by Roman gold coins

The end of Gupta rule in the sixth century due to a Hun invasion ushered in a period of uncertainty when again a number of local kingdoms rose in different regions issuing region-specific coins which were poor in both metallic content and artistic design. Thus, during a long period stretching till the thirteenth century a mix of designs borrowed not only from the Kushana-Gupta pattern but also from foreign designs were employed by these dynasties in Western, Eastern, Northern and Central India. South India developed a different coin paradigm moving towards a gold standard which was inspired from the Roman gold coins, which arrived in the region during the first three centuries of the first millennium.

Era of Islamic coinage 

In eighth century Sindh, a prosperous kingdom on the North-Western coast of India was annexed to the Islamic Caliphate by Muhammad bin Qasim in 711-12 CE. Sindh became the first part of the Indian sub-continent to come under Islamic influence and issued a local Islamic coinage in around 10-11th century CE. Though these coins adhered to larger Islamic standard of Arabic legend, they lacked other Islamic features like the date in Hijri era and the name of the town where the coins were struck. 

Proper Islamic coinage could not be established even by Muhammad Ghori after his conquest of Delhi in 1192 CE. On the contrary, Muhammad Ghori aka Muhammad bin Sam had to issue coins with images of Goddess Lakshmi in Kannauj region to respect the local coinage traditions. Indo-Islamic coinage came into its own only during the reign of Illtutmish (ruled 1210-1236 CE) who formally gained the permission of the Caliph in Baghdad in 1229 CE for issuing coins in his name. However, Indo-Islamic coinage gradually became the dominant coinage of medieval India under the five dynasties of the Delhi Sultanate viz. the Slave dynasty, the Khaljis, the Tughluqs, the Sayyids and the Lodhis. 

The Delhi Sultans power rose under the Khalji-Tughluqs till massive revolts during Muhammad bin Tughluq’s reign and afterwards led to the formation of regional Sultanates in numerous regions like Malwa, Gujarat, Deccan, Bengal, Jaunpur, etc. Many of these regional sultanates issued coins copied from the Delhi Sultanate’s coinage. In South India, for instance, Ala-ud-din Bahaman Shah, the founder of the Bahamani Sultanate issued silver tankas which copied the legends of Ala-ud-din Khalji’s coins three decades after the latter’s death. The Bahamanis’ rival kingdom of Vijayanagara revived gold coins with the images of Hindu deities which became popular even in Bahamani territory due to their superior gold content!

Arrival of rupaiya, paisa and mohur

The main age of Indo-Islamic coinage arrived with the Mughals though with some deviations under Akbar and Jahangir who freely employed images on their coins. Akbar reformed Mughal coinage by adopting Sher Shah Sur’s bimetallic currency of silver Rupaiya and copper paisa and added a gold coin called the Ashrafi/Mohur. He further introduced market-controlled exchange rates between the three coins in the imperial markets. Thus, the Indian monetary system began a new journey with the issue of crores of Ashrafis, Rupaiyas and Daams during the next two-and-half centuries of Mughal rule. In the interim period, numerous regional powers tried to challenge the Mughals’ monopoly over Indian coinage by issuing their own coins; notably Chhatrapati Shivaji issued gold huns and copper Shivarais with his titles in the Nagari script. Other powers who issued their own coins included the Sikhs, Haider Ali/Tipu Sultan of Mysore, the Ahoms of Assam, Tripura and the rulers of Kangra which were different from the Mughal paradigm. European powers like the Portuguese, the French, the Danish and the English also began issuing coins from their local bases in Western, Southern and Eastern coasts of India irking the Mughals who tried to exercise exclusive monopoly over the right to issue coins in the Indian sub-continent. The English in particular were even punished by Emperor Aurangzeb for issuing Persian legend coins with names of English Kings from Bombay in 1688-89 by naval blockading of the Island and suspension of their trading rights on the Western coast. However, these powers rose with the decline of the Mughals and continued to issue their coins. The English bided their time and ‘bought’ the permission to copy Mughal designs in Madras (1692 CE) and later in Bombay (1717 CE) and Calcutta (1759 CE) by bribing officials or even gullible Princes and Emperors with European novelties! These Anglo-Mughal coins are a testimony to the wider acceptance of coins issued in the name of the Mughal Emperor in Indian trade circles.

British India coinage

The ambitious English further bid their time till the Mughals were weakened enough for them to step in and take over Delhi which formally came under English control in 1803 CE The English continued the charade of issuing coins in the Mughal Emperor’s name till 1835 when they abruptly switched over to a Uniform Coinage with the name and image of the English monarch. The Uniform Coinage used a new machine technology imported from Birmingham and was said to have been introduced to remove the hundred-odd types of rupees in circulation from the markets! Thus, from 1835 began a period where the Mohur-Rupee-Paisa were issued with English and Persian legends with the name of the East India Company and the image of the British monarch till 1858. In 1858, the Indian revolt against the East India Company forced it to give the power directly to the British Crown. The Coinage design however saw a change in Queen Victoria’s title from ‘VICTORIA QUEEN’ to ‘VICTORIA EMPRESS’ only in 1877. A number of princely states which survived Dalhousie’s annexations of 1850s were prompted to either give up their coining rights or issue coins with images or legends in name of the British monarch as the Empress of India. Some notable Rajput states like Bundi, Bikaner, Alwar etc. succumbed to the pressure. However, the proud rulers of Mewar issued coins with a smartly worded legend ‘DOSTI LANDHAN’ in Devanagari to escape expressing overt loyalty to the British Crown. Hyderabad and Bahawalpur were two Muslim-dominated states whose coinage was not interfered with. Interestingly, Hyderabad also issued Bank notes in the name of its rulers, the Nizams right up till its absorption into India. 

The British freed of all pretensions began a British India coinage from 1862 till 1947. Its major issues were silver rupees and its lower fractions, however, gold mohurs were also issued by the government. Importantly, the ‘Indian government’ formally began issuing Paper Money after the passing of the Indian Paper Currency Act of 1861 backed by metallic reserves matching the actual promissory notes. The Government of India initially began issuing Bank notes first through the Controller of Currency but later the Reserve Bank of India was established in 1935 for monitoring India’s monetary system. Also, the beginning of the World War II led to the stoppage of use of pure silver for coining the rupees in 1939 itself when silver rupees were recalled by the government. The government formally began to take steps to begin a token coinage which began in 1940-45 with the replacement of silver by half-silver. After 1945, alloys of different types were used to mint a token British India coinage till 1947.

Post British

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Post-independence, the British currency continued to be legal tender till 1950 when the Republic of India began issuing its sovereign currency with the emblems of the Republic replacing the British monarch as the first step towards establishing the modern Indian currency system. In 1957 the coinage was turned into a decimal system where one rupee was deemed as equal to 100 paisa replacing the Anna system of the British period. This coinage called Naya Paisa was the last definitive step towards today’s system of the Indian Rupee (INR) recognised as the formal currency of the Indian nation internationally.

Fiscal trajectory

Till 1300 BCE: Barter system

Vedic period: Cows, Rattis (seeds), Hiranyas (precious metals)

Post-Vedic period: India’s first state certified coins in silver

326 BCE: Die-struck bronze coins minted with life-like images of deities and rulers, post confluence with Greek rulers

Sixth century-Thirteenth century: Period of uncertainity follows due to fall of empires, leading to region-specific designs. Gold coins with heavy Roman influence
10th century to mid-12th century: Islamic coinage with no images, and only praises of Allah and Prophet Muhammad inscribed

Mughal rule: Bimetallic currency introduced, with silver Rupaiya, copper paisa, and a gold coin called the Ashrafi/Mohur. Regional powers challenge Mughal monopoly over Indian coinage by issuing their own coins

1835-1858: Abrupt switch over to a Uniform Coinage with the name and image of the English monarch. The Uniform Coinage used a new machine technology, and was introduced to remove the hundred-odd types of rupees in circulation from the markets

1862-1947: British India coinage begins, with silver rupees and its lower fractions, along with gold mohurs. Also, formally began issuing paper money 

World War II: Stoppage of use of pure silver for coining the rupees in 1939; silver rupees recalled by government

1950 onwards: Republic of India began issuing its sovereign currency with the emblems of the Republic replacing the British monarch 

Photo credit : www.mintageworld.com – world’s 1st online museum for Vintage & Current Coins, Stamps & Currency Notes