Cashless versus cash less
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We all aspire to become a part of the cashless economy. Ironically, there are more cashless people in India than the number of people who have the means to live cashless lives.
Two days after the announcement of the cancellation of Rs500 and Rs1,000 currency notes in India, I was flying from Delhi to Bengaluru on an IndiGo flight, the so-called low-cost airlines. I had a copy of the day’s Mint newspaper in my hand, and I kept it in the seat pocket when I took my window seat. Ten minutes later, when we were airborne, the person sitting on the seat next to me picked up my newspaper without seeking my permission. He was in his 60s and I thought: “This is India; we are like this. We don’t mind taking things from others as long as it is as perishable as a newspaper.”
In about another 10 minutes, he folded the newspaper and was about to shove it back into the seat pocket when the aisle seat passenger asked him for the newspaper. The earlier gentleman swiftly handed it to him, without even a blink, let alone courteously inform me.
That is how people in India — who have power, who make policies or who take the decisions — behave. We take responsibilities of things and people without any consensus. We give commands without asking; and we take our people for granted. We also have a habit of assuming that, for the larger good, people should adjust. And who are these people who are always expected to adjust: the poor, the unconnected, the disenfranchised, the unbanked, the daily wagers, the villagers, the tribals, the minorities, the Dalits, the farmers and the women.
When the announcement of the de-legalization of the high-value bank notes was made, traditional media, social media and various other such platforms were full of discussions on how it’s a good move against black money and for transforming our economy.
Meanwhile, during the same hours, my tweets and other social media postings were related to the pain that a poor person, an unbanked individual or a daily wager might be facing because of the move. However, all my friends told me (some even consoled me) not to worry, as it was ultimately for the betterment of the country, even if there would be inconvenience for a few days.
I decided to ask the WhatsApp group of our rural coordinators what they thought about this idea. They live in rural and remote locations across the country and interact with village folk on a daily basis for information and to provide services. Not one of them, located across 20-plus states, replied that the decision was good.
People were confused and fearful. Some of the responses were: “There is utter confusion here about what has been announced”; “Nobody is taking Rs500 and Rs 1,000 notes”; “People do not know what to do if they don’t have an ID proof”; “People are devastated that their few notes of savings are no good anymore”; “There is confusion on whether or not old notes can be exchanged in the bank for new ones”; “People are worried that they will have to lose out on a day’s wage if they have to go to a bank and queue up to get their currency exchanged”.
Our politicians and policymakers are incapable of thinking on behalf of the aam aadmi (common man).
There are more than 400 million people in India who are officially illiterate, incapable of filling a simple form and, hence, they end up paying a bribe or commission to people who agree to fill the forms on their behalf for entitlements. Now all these people, for no mistake of theirs, would suffer losses in several ways. If they don’t have an ID proof, they will either lose their entire life’s savings or give it to a local money lender at an exorbitant exchange rate. If they do have an ID proof but are not literate, they will have to pay an agent to fill up their forms. They will also lose out on at least a day’s wage to stand in long queues outside the few bank branches in their locality to get their notes exchanged.
According to a report prepared by PwC India, the country had 557 million unbanked people in 2011. In 2013, a little fewer than 400 million people in the country had an account. By the end of January 2015, the Pradhan Mantri Jan Dhan Yojana had led to the opening of 125 million new bank accounts. Unfortunately, most of these accounts have remained inactive and with zero balance. Clearly, the habit of banking has not been ingrained in Indians.
All these people are not even remotely part of the aspiring cashless economy. Their earnings, savings and expenses are all in cash. And now their savings, which are of just a few thousands and probably stored in Rs500 and Rs1,000 notes will be worthless unless they can find a way to exchange them.
I wonder how much financial loss would India’s daily wagers suffer if 400 million people (who earn about Rs200 a day) lose out on a day’s wage. That is about Rs8,000 crore.
We know that in villages, this will not be just about a day. For many, it could take anywhere between two to 10 days of running from pillar to post. So what have we gained from the demonetisation decision? I wonder if there was another way we could have done this without the consequent pain and losses to the poor.
I am not an economist but the only economic theory that I understand is ‘the more you give, the more you get’. And giving leads to circulation of money, leading to prosperity of the society. But what I see now is ‘the more you take, the better you are’. We are all takers from the poor without giving them anything—not even an opportunity or a chance.
Osama Manzar is founder-director of Digital Empowerment Foundation and chair of Manthan and mBillionth awards. He is member, advisory board, at Alliance for Affordable Internet and has co-authored NetCh@kra–15 Years of Internet in India and Internet Economy of India. His twitter handle is @osamamanzar.