I think Nirmal Kumar has hit upon something. Please allow me to ramble.
There is relative scarcity, which coins are harder to find than others. I think engipress is quite right to observe that this aspect is covered by catalogue pricing. Do we have an easy to find thread that helps newbies to get the information?
There is also absolute scarcity, which is usually indicated by S or up to four Rs. My take on this is here
I would agree with those who said there is no scarce or rare post 1947 Indian coin as long as the statement does not include patterns.
I understand from previous posters that the real problem is not scarcity, but abuse of the terms scarce and rare. However, these terms are not defined. Also, the seller may have a cop-out in the sense that India does not publish mintage figures (or does it now?)
Maybe one thing to achieve would be a clear statement of which pieces are really scarce or rare. Maybe that list is very short. A second step could well go beyond scarcity. How about a covenant for Indian coin dealers? Something that would be really easy to live up to as long as you are honest. What I have in mind is something like:- I agree that all coins are as described. Any error in description will entitle the buyer to a full refund if reported within [x days] of the sale. I will refund any coin that has not been taken from its original packaging.
- I agree to the list of scarce and rare coins below [list of coins] with the exception of the following [list of exceptions]. I will not describe any other post 1947 Indian coins as scarce or rare.
- I will not deduct any payment for coins until the coins are sent or collected from me.
- I guarantee that all coins I sell are genuine, except where clearly and explicitly marked as fake. I will refund any coin I have sold that turns out to be a fake within [x days] of the sale or forever, if I have published a picture of the coin.
- I guarantee that any picture I publish is of the coin I am selling, not a coin of the same type and that the picture is a fair reflection of the coin as it is.
- In case issues arise with the above, I accept arbitrage from a panel of members of World of Coins, one to be selected by me, one by the buyer and the third one to be selected by the nominated panel members.
- In recognition of which, I have the right to carry the "approved by WoC, India section" logo on all my publicity as a guarantee to the buyers.
If you like this approach, remember that it takes an administrator to "sell" the covenant (we would want to have at least one big auction house on board), keep a list of those who have accepted it and set up an arbitration procedure in case of problems. It would make a lot of sense to me if that administrator would be Indian.
The above, including the wording of the covenant, is a suggestion only, nothing more.