Jammu and Kashmir Finance Minister Haseeb Drabu on Wednesday said that the cash-to-state GDP ratio of the state hovers around 20-22 per cent which is higher than that of the country at around 13 per cent. “The cash-to-GDP ratio of the country hovers around 13 per cent which is almost double the globally accepted standards of 6-7 per cent”, Drabu said on Wednesday.
Watch What Else is Making News
Drabu, who was addressing a special meeting of J&K SLBC to discuss implementation of Digital Banking Programme in J&K State, said in J&K this ratio is still higher at 20-22 per cent of the SDP even when compared with the like-to-like economies of other states.
Attributing the same to socio-economic and historical perspectives of the state, he said that the people of the state are conventionally in the frame of having stocked currency.
However, in the contemporary circumstances, the uncertainty in the economy of the state due to bandhs, curfews, hartals has called for re-adoption of such habits among the people, the Minister said.
However, these parameters set the context for us to devise specific strategies to deal with the higher percentage of cash in the State economy, he said.
Talking about the technological aspect of the matter, he stated that it should be looked at as an enabler to reduce the cash in the system and our focus should be on the macro as well as micro level transition in socio-economic and cultural set up of the state.
Stressing the need for developing customised strategies he stated that the Government and the banks operating in the State must work in coordination to develop trust among the people to use the alternative channels offered by the banking system to transact their businesses.