Online news channel!

Tag: cashless economy

Demonetisation not politically motivated, says PM Narendra Modi ahead of 50-day deadline

With just a day left for the 50-day deadline for demonetisation’s benefits to show, Prime Minister Narendra Modi has claimed that the move has forced black money, whether belonging to corrupt politicians or bureaucrats, out in the open.

In an interview with India Today magazine, excerpts of which in text form were telecast by a group news channel, Modi said counterfeit Indian currency notes available with the enemies were instantly neutralised.

“Black money has been forced out into the open, whomsoever it may belong to, whether it is corrupt politicians, bureaucrats, businessmen or professionals,” said Modi on the outcome of his 8 November sudden move to demonetise Rs 1,000 and Rs 500 notes.

“Counterfeit notes, which our intelligence agencies have reported to be available in big volumes with our enemies, have been instantly neutralised. Similarly, cash held by terrorists, Maoists and other extremists has also been neutralised. There has been a crippling impact on dangerous and highly damaging illegal activities such as human trafficking and the narcotics trade as well,” he added.

PM Narendra Modi. File photo. PTI

PM Narendra Modi. File photo. PTI

“One must be able to distinguish between neeti (policy) and rann neeti (strategy) and not put them in the same basket. The decision of demonetisation, which reflects our neeti, is unequivocally clear, unwavering and categorical,” the prime minister said.

“Our rann neeti, however, needed to be different, aptly summarised by the age-old saying of tu daal daal, main paat paat. We must stay two steps ahead of the enemy. When problems are identified, we respond promptly and take necessary steps,” he added.

Modi said it speaks of the government’s “agility in responding quickly and keeping up with the evolving situation”.

“I know many will prefer if we issue one guideline and then allow them to walk roughshod over it. Let me assure them that no such thing will happen,” Modi said.

The prime minister also clarified that the objective behind the decision was to clean up the economy and curb the menace of black money.

“Our objective was to clean up the economy and society of the menace of black money, purging the distrust, artificial pressures and other ills that came with it,” he said.

“The revenue collected will be used for the welfare of the poor, downtrodden and the marginalised.”

Modi also urged citizens not to regard digital transactions as a short-term substitute for cash payments.

“Digital transactions should not be viewed as a short-term substitute for cash payments,” Modi told India Today magazine in an interview.

“Digital transactions facilitate formal accounting and sizing of the economy,” he said.

“They also deliver greater tax compliance,” he added.

On former prime minister Manmohan Singh, Modi said, “Regarding Manmohan Singh ji, it is interesting that the words ‘monumental mismanagement’ came from a leader who has been at the helm of India’s economic journey for around 45 years.”

“His reference to organised loot was perhaps a reference to the unending string of scams under his leadership… From the coal scam, to 2G and CWG scam. Demonetisation on the other hand is an unprecedented step to confiscate the loot of the corrupt,” he said.

“I pity a few of our opponents, especially the Congress leadership, for the desperation they have been exhibiting. Congress leaders are entirely preoccupied with only one thing — elections. There is nothing political in the demonetisation,” Modi said.

The prime minister said: “It was a tough decision taken to clean our economy and our society. If I were guided by short-term electoral politics, I would have never done so.”

First Published On : Dec 29, 2016 21:32 IST

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

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

Union minister Mukhtar Abbas Naqvi urges minority communities to go cashless, fight corruption

Moradabad (UP): The inaugural ‘cashless chaupal‘, an initiave of the Centre aimed at helping minorities connect with cashless economic system post demonetisation, was organised in Moradabad on Monday with union minister Mukhtar Abbas Naqvi pitching for Muslims to join the campaign against “cancer of corruption”.

During the chaupal, held in the district’s Dalpatpur tehsil, the Union Minister of State for Minority Affairs (Independent Charge) informed the attendees about benefits of digital transactions, propagating it as an “effective mission” to establish transparent economic system to fight black money.

Bank officials helped people present at the event in downloading various mobile applications related to digital payment, net and mobile banking and also made presentation on digital payment system, a statement said.

“Digital transaction campaign is aimed at establishing an economic system which is based on less cash and maximum digital payment.

“Na nakad na udhar, karen digital len den aur karobar (neither in cash nor on credit, let’s do digital transactions and business),” he raised the slogan while lauding the system, according to the statement.

“The Muslim and other sections should join this campaign and help eradicate the cancer of corruption,” Naqvi said, adding the weaker sections of the society will benefit from the government’s decision.

Mukhtar Abbas Naqvi. PTI

Mukhtar Abbas Naqvi. PTI

Stating that electronic voting system could attain 100 percent success in world’s largest democracy, Naqvi exuded confidence that digital transaction, online and mobile banking too will be successful.

He claimed that cashless system will help farmers and small traders as he averred that e-payment and mobile banking can be helpful in places where banking system is not available.

Citing example of direct benefit transfer (DBT) system used by the Minority Affairs Ministry to dispense scholarships to students from minority communities, Naqvi emphasised that digital system can help remove middlemen and ensure benefits reach the deserving individuals.

He said the Minority Affairs Ministry has so far disbursed scholarships worth Rs 6,715 crore to three crore students into their bank accounts through DBT.

The union minister said digital transactions will strengthen taxation system as more people will become part of it.

Stating that several countries such as Sweden, France, Canada, Britain and Australia have become cashless economy, Naqvi said such a system can be implemented in India “easily”.

In India, there are about 103 crore mobile phone users, 50 crore internet users, 144 crore bank accounts (figures include multiple accounts held by one person) and 25 crore Jan Dhan accounts. Besides, there are over 14 lakh Point of Sale (PoS) machines and 73 crore credit/debit cards in use, he claimed.

However, the statement quoting the union minister, did not mention source of the statistics.

The second edition of the chaupal will be held in Delhi on 21 December.

First Published On : Dec 19, 2016 20:15 IST

Demonetisation to less cash: Economists can do without moral compass, not politicians

One has to be cruel to ignore this.

In Delhi, a newspaper report says the cash-starved poor have been living on charity and doles, and students have been going to langars because they have no money to pay for food in hotels. All cash-dependent economic activity has come to a standstill in the weeks after demonetisation. Factories and smaller business establishments cannot pay cash to labourers, so they are headed back home with nothing in hand. People still waste productive hours standing in long queues at banks. The grim scenario looks grimmer if you consider that around 90 people have reportedly died while waiting to get their own money.

The misery of people is visible to the naked eye. One has to be morally blind to argue that everything is fine. The contention that the present suffering of the masses would give way to a bright future is specious too. As the apologists of the government, especially a section of the economists, keep arguing in favour of demonetisation despite the apparent social and economic dislocation it has caused around, one wonders whether that feeling called compassion is dead now.

Representational image. Reuters

Representational image. Reuters

Economists in ivory towers can do without the moral compass, not politicians. They can suggest ideas that are cynical to the core, even criminal, but politicians cannot be that callous. The core value of their vocation is supposed to be built around empathy. What we notice post-demonetisation is callous disregard for it. A good gesture from the government after the first two weeks of demonetisation would have been the frank admission: “Yes, we botched up. We could have planned better. Sorry for the inconvenience.” But no, what we have is adamant defence of the move, backed vociferously by the fervent drum-beaters of the ruling dispensation.

Was less cash transaction part of the original deal? When Prime Minister Narendra Modi announced trashing of Rs 500 and Rs 1,000 notes, the buzz was black money. People were ready to undergo some pain so that tainted money could get purged from the system. There was more appreciation than anger for the prime minister in the long queues outside banks. Now that the talk has suddenly shifted to electronic transactions, the ordinary people have reason to feel that they have been conned.

The questions come thick and fast: What was the need to go for demonetisation if the aim was to promote less cash transactions? What’s the logic behind clubbing one with the other? A good idea it might be but shouldn’t less cash be a gradual process? What right does the government have to force people to shun cash habit this way? Was the real intent behind demonetisation something else? The poor are obviously suffering but who’s having a good time at their cost?

These are not questions that would have been raised had the government stuck to what it claimed while announcing demonetisation. Now people have the right to ask: Was it necessary to go for it? Which economic common sense drove you to go for it? How come you failed to anticipate it was going to be this messy?

It is being alleged by the political opposition that the government has shifted the goal post. It indeed has, perhaps as a face-saver, because it grossly misunderstood the dynamics of black money and sought to take the populist route, as in every other matter, including diplomacy, to fight it. A couple of weeks into demonetisation, it was clear to all concerned that things were not going right. The government had the option of admitting to people that it went wrong but it decided to be clever.

It could be either arrogance or fool-hardiness. The strong advocacy of less cash is certainly not doing the government any good. Worse is the claim that everything alright and the poor are happy.

It is cruel. Someone out there ought to start thinking with some compassion.

First Published On : Dec 15, 2016 21:13 IST

Demonetisation: Going cashless can give rise to online scams; we need to stop volunteering data

Sweet are the uses of adversity. And for most people in the country the slow start to the week in being reunited with their money has left them vulnerable to scamsters of all types. Despair does that, makes you reach out and cling to anything even though your mind tells you it is a lot of rot.

The latest one doing the rounds is a letter on an RBI letterhead ostensibly signed by Urjit Patel informing you that a sum of 5,00,000 pounds will be sent to your bank account if you fill in the form. It even has a dotcom address.

Representational image. PTIRepresentational image. PTI

Representational image. PTI

It is a pretty neatly done piece of nonsense and in the current mood where there is this mental photoplay in the public’s mind that the Rs 2.5 lakh crores unearthed is supposedly going to fall like confetti into their hands and end poverty, the gullibility factor rises exponentially.

One would imagine it is a deft and swift way to create a database or get into something more insidious like using the details provided to create false accounts, copy credit cards and whatever other fiscal thievery one can engage in.

For the middle class that still falls for such stuff in considerable numbers, the need to believe intensifies when the survival factor kicks in. Gone is the first month’s warmth and togetherness and the neighbourly feelings. “We will overcome”, is being replaced by the sentiment, “we cannot take it any more”.

After the three holidays, the absence of enough notes prompted by the return of the snaking queues and a lower, much lower, patience level has people wondering what’s going on. Add to all this the information that the printing press cannot print enough notes for 195 days and that we have not even reached 25 percent of the target and we begin to wonder if the nation hasn’t been dug into a hole.

As I said earlier, the filthy rich don’t seem to be particularly unhappy. The underworld hasn’t yet been yanked off to face the consequences and the gap between Rs 2,000 and Rs 500 is just too large to make things viable in a 98 percent cash-oriented society.


A screenshot of the RBI letterhead supposedly signed by Urjit Patel.

More scams are likely to depart from social platforms. If it wasn’t for the princely sum and the fact that it is not Indian currency, this scam would have been a lot more convincing. Imagine if you, in your intelligence, had received such a well-crafted letter with all the bells and whistles attached to it, and it said Rs 20,000 was being deposited into your account as a government dividend out of the interest accrued from the unearthed black money, would you not be tempted to provide your details?

The ‘half a million pounds’ is a reflection of the contempt in which these scam artists hold the masses. If one could trace the source of this effort you would find that several thousand people would still have cheerfully handed over their details.

We are not yet trained to keep our details confidential. Edward Snowden, the whistleblower who exposed the US invasion of privacy into the man on the street, would have had a very easy time in India obtaining private data.

We volunteer it.

The government is duty-bound to inform the nation that no money is being placed in anyone’s account with reference to the black money hunt or the demonetisation initiative.

Till then do not send your information to anybody. That is the next big problem we will face. As the supporters of the cashless e-school tom-tom their online world, most of us won’t know the difference between a genuine document and a con.

First Published On : Dec 14, 2016 12:16 IST

Arun Jaitley: Congress extremely uncomfortable with demonetisation given its scandalous record

New Delhi: Launching a scathing attack on Congress, Finance Minister Arun Jaitley on Tuesday said the party’s “scandalous record” is making it extremely uncomfortable with the Modi government’s anti-corruption campaign of which the demonetisation of high value currency is a cornerstone.

Junking of old Rs 500 and Rs 1,000 notes, he said, will help the world’s fastest growing major economy to move towards less cash economy and digital payments that will help shore up tax revenues and check evasions.

Besides, restrictions on cash spending together with mandatory furnishing of PAN will help bring down the level of corruption, he said, adding that the transient problems arising from demonetisation are being addressed by rapidly replacing the junked currency with valid banknotes.

Union Finance Minister Arun Jaitley. PTI

Union Finance Minister Arun Jaitley. PTI

Amid daily barbs by Congress vice president Rahul Gandhi against Prime Minister Narendra Modi, Jaitley said the party during its 10 year continuous rule from 2004 to 2014 did not take a single step either against corruption or black money.

Corruption scandals — ranging from 2G spectrum scam to coal block allocation to Commonwealth Games to deal with AugustaWestland for procuring VVIP helicopters — peaked during the UPA regime, he alleged.

“Each of the scandals which is even today discussed in public space belongs to that period. Given this scandalous record, it is not surprising that Congress party is extremely uncomfortable with anti-corruption campaign that the NDA led by Narendra Modi has launched,” Jaitley told reporters here.

High denomination notes, as percentage of total currency in circulation, increased from a mere 36 percent to over 80 percent during UPA regime, he said in oblique reference to ill-gotten money usually being hoarded in high denominations.

“There are economic costs of dealing in cash, there are social costs of dealing in cash. These are the costs which system has to bear,” he said.

Demonetisation, he said, is part of the system overhaul by the NDA government.

“It is our strategy that from high cash dominated economy we should become a less cash economy where the amount of paper currency comes down,” he said.

Cash will exist but there would be greater digital payments.

“Notwithstanding some transient problem which people have to face, we are now rapidly completing remonetisation exercise. Everyday RBI is injecting a large amount of currency into the banking system as part of its remonetisation exercise. Significant amounts are going to be injected in next three weeks which are gradually bringing the pressure down,” he said.

As more and more of the new currency comes into circulation and re-circulated in the banking system, ATMs will make it increasingly available, Jaitley said.

On the advantages of the demonetisation move, he said a large volume of cash has come into the banking system and taxes will be recovered wherever they are not paid.

“Future transactions would be substantially digital and once they are substantially digital they get caught in the tax net. Therefore the future taxation level would be much higher than what is currently being collected,” he said.

It would also enable the government at some stage to make taxes more reasonable which will apply to both direct and indirect taxes, he said.

Also, the banking system will have a lot more cash, which will boost its ability to support the economy with low-cost lending.

“Obviously with all these advantages the social cost also on the system will go down. Therefore, the cash used for bribery, for counterfeit currency, for terrorism, for evading taxes itself will go down,” he said.

Taken together with other reforms particularly the proposed Goods and Services Tax (GST) and the restrictions on cash spending subjected to PAN declaration, it is going to “bring down the levels of corruption in society”, he said.

“It is going to bring down cash transaction in society and it’s going to bring down levels of evasion as far as taxation is concerned,” he said.

Stating that the government is ready for a debate on the demonetisation issue in the Parliament, he urged the Congress and other opposition parties to “rise above slogans and look at the positive advantages that this change is going to bring to the economy as a whole”.

“Therefore, from national perspective, I would appeal to the opposition to join this campaign rather than create obstruction and fail to understand what the real purpose and the import of this campaign really is,” he said.

First Published On : Dec 13, 2016 15:41 IST

Demonetisation: 5 hurdles to Narendra Modi’s push for cashless economy

By Devanik Saha

On 27 November, 2016, during an election rally in Kushinagar, Uttar Pradesh, Prime Minister Narendra Modi appealed that all Indians get familiar and make other familiar with cashless transactions.

The same day, during his radio programme Mann Ki Baat (What’s on my mind), he said: “Learn how this digital economy works. Learn the different ways you can use your bank accounts and internet banking. Learn how to effectively use the apps of various banks on your phones. Learn how to run your business without cash. Learn about card payments and other electronic modes of payment. Look at the malls and see how they function. A cashless economy is secure, it is clean. You have a leadership role to play in taking India towards an increasingly digital economy.” Modi and his cabinet ministers have now launched a major social-media effort to promote cashless transactions, which include e-banking (or banking over computers or mobile phones), debit and credit cards, card-swipe or “point-of-sales (PoS)” machines and digital wallets.

These are some of the tweets his cabinet ministers and their ministries issued in the four days after Modi’s first cashless-economy push:

India’s internet users surpass the US, but smartphone, internet penetration remain low

As many as 68 percent of transactions in India are done in cash, according to this analysis by Business Standard, while other estimates say 90 percent of all transactions are in cash. There are five hurdles to Modi’s ambition of converting India to a cashless economy:

1. 342 million internet users, 27 percent of Indians: Earlier this year, India surpassed the US to become the country with the second-largest number of Internet users, according to this June 2016 report by investment firm Kleiner Perkins Caufield & Byers. There are 342 million internet subscribers (an Internet “penetration rate” of 27 percent) in India, data from Telecom Regulatory Authority of India (TRAI) reveal.

The global median is 67 percent, IndiaSpend reported in March 2016. India lags most major economies and performs worse than Nigeria, Kenya, Ghana and Indonesia, among other countries, the data reveal.

Put another way, 73 percent of Indians, or 912 million, do not have Internet access.

Of those who use the Internet, no more than 13 percent live in rural India (or 108 million of 833 million who live in rural areas), which has been worst hit by the November 8, 2016, invalidation of Rs 500 and Rs 1,000 notes that made up 86 percent of notes in circulation.

In urban India, 58 percent of people access the Internet.

2. Smartphone usage rate among adults 17 percent: For a majority of banking applications, a smartphone is a prerequisite. India is Asia-Pacific’s fastest-growing smartphone market, but no more than 17 percent of Indian adults own a smartphone, according to this 2016 survey by Pew Research. Only 7 percent of adults in low-income families own a smartphone; the figure for wealthier families is 22 percent.

3. 1.02 billion mobile subscriptions, but only 15 percent have broadband internet: India had 1.02 billion wireless subscriptions, but after scrubbing the data of inactive and duplicate connections, India has 930 million (90%) active subscribers, according to this November 2016 TRAI report. Of these, 154 million subscribers (15 percent) have broadband connections (3G + 4G).

4. Average page load time on mobile 5.5 seconds, China 2.6 seconds: The average time to load a page on a mobile phone is 5.5 seconds in India, compared to 2.6 seconds in China, 4.5 in Sri Lanka, 4.9 in Bangladesh and 5.8 in Pakistan, according to the “State of the internet Q1 2016” report by Akamai Technologies, a global content delivery network services provider. Israel has the fastest load time at 1.3 seconds.

Mobile Internet speeds will make users less likely to use their phones for banking transactions, with Oracle Maxymiser, a website optimisation tool by Oracle, a US multinational, reporting a two-second threshold before users stop an online transaction–although 68 percent of respondents reported they would not wait six seconds for pages or images to load on a bank’s website or mobile site.

5. 856 PoS machines per million Indians: There were 1.46 million PoS machines in use in India–that is, 856 machines per million people–according to this August 2016 Reserve Bank of India report. In 2015, Brazil–with a population 84 percent lower than India–had nearly 39 times as many machines (32,995), according to this 2015 report from Ernst & Young, a consultancy. The PoS machine rate was 4,000 per million people in China and Russia.

More than 70 percent of the PoS terminals are installed in India’s 15 largest cities, which contribute to more than 75 percent of transactions, says the Ernst and Young report. This has not changed after #notebandi, as the scrapping of Rs 500 and Rs 1,000 notes is called colloquially.

Most requests for more PoS machines are still from “tier 1”, or metropolitan, cities, a banker with a leading private sector bank told the Indian Express on 29 November, 2016. “In tier 2 cities, customers are now slowly making the shift from using their debit cards to withdraw cash to using them for payments. The demand is progressing slowly,” he said.

As an incentive to banks and manufacturers of PoS terminals, the government has waived 12.5 percent excise duty and 4 percent special excise duty on these machines, as it hopes to install an additional 1 million PoS machines by March 2017.

Saha is an MA Gender and Development student at Institute of Development Studies, University of Sussex.

First Published On : Dec 3, 2016 10:22 IST

Mann Ki Baat: PM Modi pitches for cashless economy even as job loss, subdued growth fear looms

Stressing upon the need to imbibe cashless economy in the system, Prime Minister Narendra Modi today urged people at large to embrace e-banking, mobile banking and other useful technologies for their daily transactions.

Addressing the nation through his monthly radio programme show “Mann ki Baat”, Modi urged the youth of India to take a pledge to become part of a ‘çashless society’ for a corruption less, black money-free India.



“Poor started using Rupay card, which was not used that frequent, after 8 November decision and nearly 300 percent development happened,” Modi said in his radio programme.

For small traders, who have been facing the hardships due to the prevailing cash crunch in the system, Modi urged them to adopt cashless method. “I urge my trader brothers and sisters…this is an opportunity for them to enter the digital world,” said Modi, adding that adopting cashless economy will bring about a huge transformation in the country.

Modi has been more vocal about the usage of less cash and more digital technology-related transactions in the economy, given his decision earlier in the month (8 November) to demonetise high denomination currrencies of Rs 500 and Rs 1,000 notes from the system to keep a check on the black money generation.

It has been estimated that people have exchanged and deposited over Rs 5.44 lakh crore worth of scrapped Rs 500 and Rs 1,000 notes at different banks till 18 November following demonetisation of the higher denomination currency.

Although the government’s demonetisation decision was welcomed by majority of the poeple across the country, the Centre, however, came under severe criticism from various political parties for not taking evasive measures to ease common man’s concerns.

Specifically, the decision led to severe cash shortage in the economy, with bank branches and ATMs frequently running out of cash in just few minutes time, thereby, leaving people hassled. With several ATMs for better period post the demonetisation announcement were not calibrated to dispense new cash denominations, people standing in long queues were forced to leave with little or no cash at times.

Reports of several people losing their lives standing in long queues to withdraw money triggered angry reactions from the masses with some even calling for the government to roll back the decision.

The government’s constant flip-flop on exchanging and depositing old cash notes in the bank branches, besides changing the limits on cash withdrawals created lot of confusion amongst the people.

Immidiately after the demonetisation announcement, the government first permitted people to exchange banned notes of up to Rs 4,000, with the exchange limit later being increased to Rs 4,500. The government also asked banks to start using indelible inks on customers exchanging old notes on fears that same people were going to different banks to exchange old notes.

A week later, the government reduced the exchange limit from Rs 4,500 to Rs 2,000. On cash withdrawal front, the government first allowed Rs 2,000 to be withdrawn before increasing it to Rs 4,000 per card. The government also kept changing the daily and weekly withdrawal cash limits at banks leading to lot of confusion among the people.

While the government has been hell bent on flushing out fake currencies and black money from the system, traders, vegetable, fruit and flower vendors across the country have already witnessed a major slowdown in their businesses in past few weeks.

With the business being hit hard, especially, in the country’s unorganised and MSME (medium and small enterprises) sectors, there have been reports of massive job losses across the country. Last week, CPI leader Sitaram Yechury said over four lakh people have lost their jobs due to the demonetisation exercise.

Finally, the demonetisation move has forced several economists, rating agencies and brokerages to slash the country’s GDP growth estimates for the next few quarters citing subdued consumer spending and likely slowdown in economy. Not just that, former Prime Minister Manmohan Singh, too, last week cautioned that GDP could fall by about 2 percent in the aftermath of demonetisation.

First Published On : Nov 27, 2016 14:20 IST