Gafoor T was restless when he found 70 percent drop in sales in his tea powder shop at Kottakkal in Malappuram district of Kerala post-demonetisation. He did not have much hope when employees of the Akshaya Common Service Centre approached him with a suggestion to use e-wallet to overcome the cash crunch that hit his business.

Though Gafoor was aware of e-wallets, he was skeptical how his customers, who are mostly rural folks, will receive it. To his utter dismay, Gafoor found most people willing to use their mobile phones to buy tea leaves.

After he put up a board announcing acceptance of e-wallets outside his shop, Gafoor saw not only his old customers returning but also new ones joining him. This has helped him not only cover the loss but also gain additional 10 percent sales in just one month.

Niyas Pulppadan, Malappuram district coordinator of Akshaya, a project initiated by the Kerala government in 1990s to bridge digital divide, said many like Gafoor in the district had switched on to cashless transaction methods.

He told Firstpost that majority of the 850 merchants at Kottakkal were now using one or the other digital payment platforms to run their business. He said people both in rural and urban areas were eager to try the cashless transaction options.

All this is made possible by the intensive campaign launched by Akshaya, which was designated by the Union Ministry of Electronics and Information Technology as the nodal agency for the ‘Go Cashless’ campaign in Kerala, to promote digital payment platforms among merchants and the general public.


Cashless drive in Kerala has found many takers. Photo courtesy: TK Devasia

The drive being implemented through 2,654 Akshaya citizen service centres across Kerala with the help of banks and other agencies concerned and is aimed at bringing all 941 village panchayats, 87 municipalities and six corporations in the state into a cashless regime.

Niyas said almost all 94 panchayats and 12 municipalities in Malappuram district had completed the target and the district was ready to be declared as the first cashless district in India. A place is deemed to be cashless, when at least 10 traders and more than 40 consumers start using digital wallet as per the Government of India’s directive.

“We needed to enable only 4,240 consumers and 1,060 traders to use digital wallet to get the cashless district status according to the government norms. But we have already reached out to 18,650 people and more than 1,200 traders in the district. We expect an official declaration in the first week of January,” said Niyas.

PP Jayakumar, manager, e-Governance and networking, Akshaya, said Malappuram was able to march ahead as it has a well-knit Akshaya network and has the highest number of migrants working abroad.

Malappuram was the first district in the country to achieve total computer literacy. At least one member in every family in the district was made e-literate under the Akshaya project piloted in the district way back in 2002.

“The other districts that followed suit are also trying to keep pace with Malappuram. Districts like Thrissur, Kottayam, Kozhikode, Palakkad, and Pathanamthitta are closely following Malappuram,” Jayakumar said.

He told Firstpost that their attempt was to bring the entire state into cashless economy. Akshaya has covered more than 2 lakh people and 13,000 merchants in the state so far under the campaign, he added.

Jayakumar said they were trying to familiarise people with digital payment platforms by organising live demonstrations. At the training sessions, participants are also given tips on enhancing security for online banking.

The initial focus is on five platforms, namely debit/credit/prepaid cards issued by banks, USSD (Unstructured Supplementary Service Data), Aadhaar-enabled payment system (AEPS), UPI (Unified Payments Interface) and e-wallet. Jayakumar said that the e-wallet system was preferred by most people.

He said that the merchants had initially shown hesitation in accepting digital payments because of their fear about tax liabilities. However, they overcame the fear when they were told about the convenience and advantages of cashless transaction.

“The small traders need not fear about tax liabilities as turnover up to Rs 10 lakhs is now exempted from tax. This may go up to Rs 20 lakhs when GST is implemented. As far as big traders are concerned, cashless transactions will minimise the need for maintaining records and free them from security concerns,” he added.

Jayakumar pointed out a sharp drop in burglary and thefts following demonetisation. The traders, who had initially opposed demonetisation, are now fully supporting the digital payment drive. The Kerala Vyapari Vyavasayi Ekopana Samithi, which is rated as the single largest trade body in the world, is actively associating with the ‘Go Cashless’ campaign.

Niyas said that the Malappuram unit of the traders’ body had taken the lead in creating awareness among the merchants and the general public about e-wallets. They have joined hands with Akshaya in taking e-wallets to the people, he added.

Jayakumar said that the ‘Go Cashless’ campaign may help Kerala to increase the digital transactions by 30 to 40 percent. The total digital transactions in the state are now estimated to be around 30 percent. The state can easily switch over to full cashless economy with little more efforts, he added.

However, Akshaya coordinators in some districts are concerned about lack of support from political parties to the campaign. Devi S Nath, the coordinator of Palakkad district, said that the local bodies ruled by certain political parties were showing reluctance in issuing the certificate declaring the panchayats cashless.

This is mainly because of the political opposition to the demonetisation scheme. All parties, barring the BJP, had come out against the scheme citing hardships caused to the people.

While the Congress-led Opposition United Democratic Front (UDF) is lying low after their initial round of protests, the CPM-led ruling Left Democratic Front (LDF) is trying to intensify their agitation by organising a human chain across the state on 29 December .

Senior Akshaya officials said that the political opposition will not affect the campaign as cashless transaction will improve tax compliance and boost the state’s revenue. In fact, digital payment is a major component of the digital empowerment programme launched by the state government with a view to bridge the digital divide by 2020.

The programme is aimed at making 10 lakh people digitally literate. The services of around 40,000 student police cadets (SPCs) from 400 schools across the state are proposed to be used for the training.

Tablets have already been provided to the students as part of the training ahead of the campaign. The pilot phase of the project in the state capital of Thiruvananthapuram is now nearing completion. It has covered 10,000 people in the district so far.

Kerala has all infrastructures in place to embrace cashless economy. Besides 100 percent literacy, Kerala is one of the most banked states in the country today. The state achieved 100 percent bank account coverage for all the household way back in 2011. The state now has one bank branch for every 5,900 persons as against all India average of 11,000.

Apart from this, Kerala also became India’s first complete digital state in 2015 after it achieved 100 percent mobile density, 75 percent e-literacy, highest digital banking rate and broadband connection up to panchayat level. The state has implemented e-district programmes in all districts and has linked Aadhaar card with bank accounts.

Akshaya officials hope that the current campaign will enable Kerala to achieve another distinction of becoming India’s first cashless state.

First Published On : Dec 27, 2016 14:02 IST

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Demonetisation: In Kerala, many back cashless drive but political opposition remains concern