Govt forcing move to cashless transactions rather than changing spending habits

If the move was aimed at turning India into a cashless economy, then the ideal thing to do was to make people adopt e-payments as a change of habit.

Written by Kanishka Singh | New Delhi | Published:November 27, 2016 4:43 pm
demonetisation impact, demonetisation economy impact, cashless transactions impact, cashless economy, india economy change, demonetisation news The government should have given enough incentives to people to move to cashless transactions, ensure small vendors are equipped with point of sale terminals or e-wallets to take payments.

Prime Minister Narendra Modi admitted on Sunday that he understands making the transition to cashless economy is difficult and hence he urges people to move to less cash society. However, the whole exercise of moving from cash-driven economy to cashless economy has somehow been mixed with demonetisation which was apparently done to suck out liquidity from the system to dig out black money.

It is a mammoth task to achieve even one of the two. Aiming for both in one move is risky and to some extent reckless. Indian society functions primarily on cash due to lack of penetration of e-payment modes, digital illiteracy of e-payment and cashless transaction methods and thirdly habit of handling cash as a convenience.

If the move was aimed at turning India into a cashless economy, then the ideal thing to do was to make people adopt e-payments as a change of habit and not as a last ditch option in a cashless crisis situation.

The government should have given enough incentives to people to move to cashless transactions, ensure small vendors are equipped with point of sale terminals or e-wallets to take payments and wait till the time the country actually comes on board the digital India boat. If a majority of the population is first allowed that chance to move to e-payments via change in habit, such a liquidity cut would not turn out to be as big an issue as it is today.

The government has made further attempts to push its departments from cash transactions to cashless transactions. Urban Local Bodies of 4,041 cities/towns in India where at least 30 crore of the urban population resides have been told to shift to cashless transactions.

Officials have been directed by the government to promote internet banking services like RTGS/NEFT, online banking via credit/debit cards or by way of Public Finance Management Systems (PFMS). The Urban Development Ministry has said that both income and expenditure will shift online.

Now, this will mean that people will have to make e-payments in matters of property tax, professional tax, utilities like water, power & gas, fee and licensing charges, online bookings of community halls for functions, issuing or renewal of birth and death certificates, registration of shops, library membership et al.

It has also directed wages to be transferred through e-payment channels for both regular and contractual workers, payments related to any work whether contractual or not, procurement of articles, beneficiary transactions etc.

In rural areas, farmers and poor people are still struggling to get their hands on their own money. They are selling their produce in mandis at throwaway prices because buyers don’t have cash to pay them. Mobile ATMs and Micro ATMs have been a rare sight and normal ATMs usually stay shut at least a couple of days every week now. So the change in habit seems to be forced rather than incentivised and simplified for convenience. Also, it remains limited to urban areas. Rural population is left in worse off conditions.

For all the latest Opinion News, download Indian Express App

  1. A
    Abhinav Gour
    Nov 27, 2016 at 11:45 am
    I believe that's a naive outlook, as to change "habits" of a people the effort and time required requires the psyche of a nation to chamge which i believe os required im many fields also like cleanliness, lack of sense of personal space, lack of volume control, respect for women, driving sense, .... I could go on. The keasure may be painful for sime more time but overall it is a neasure which will show its full impact within six to ten months
    Reply
    1. A
      ak dev
      Nov 27, 2016 at 9:27 pm
      Can you please give me one vegetable vendor name who won't accept your as s.
      Reply
      1. A
        ak dev
        Nov 27, 2016 at 1:39 pm
        I have not heard any of the critics themselves had suffered much. They are imagining about other's problems but not a word about their own contributions to help others whom they say are suffering. They are all caught unprepared as Modi has rightly said. But they can't tell how much money they have lost as useless papers now. They express their anger by citing cases of other's sufferings.
        Reply
        1. V
          Vijay
          Nov 27, 2016 at 2:57 pm
          Agree absolutely...while the ideas are good but implementation has been poor and inconsiderate of people's habits ..it has become authoritarian approach of implementation rather than an approach based on incentive
          Reply
          1. D
            Dash
            Nov 27, 2016 at 4:52 pm
            Rome was not built in a day. Things change. You need to be positve. Desh badal raha hai. We are marching towards absecure future thanks to Modi.
            Reply
            1. D
              DA
              Nov 27, 2016 at 12:31 pm
              It was not sustainable that only 3% of us pay income tax. This hurts the poor most, since they then have to bear the brunt of higher taxes on goods.lt;br/gt;lt;br/gt;For taxes on income to be enforceable, we do need to move to cashless economy. It will has involved some pain for all of us, but it is our battle to fight and win. It very rarely happens, political will and public will are aligned.
              Reply
              1. H
                Harry
                Nov 27, 2016 at 9:07 pm
                There will be pain in the future. But the pain was there is the past seventy years as well. Nothing new here. But now the poor will get better deal which has been denied to them for a long time.
                Reply
                1. H
                  Hudaf Shaikh
                  Nov 27, 2016 at 12:33 pm
                  The mandi committees should not allow traders and procurement agencies to pay farmers in cash - instead should insist on them crediting the proceeds to the farmers accounts.lt;br/gt;lt;br/gt;To make it easier for farmers to withdraw their money, mandis should allocate space for banking agents with micro ATMs to operate from their premises.
                  Reply
                  1. Load More Comments