Cashless dream

Demonetisation has gradually come unstuck in India after just a year. The decision to withdraw India’s high-value rupee bills was supposed to rid the country of the culture of tax evasion. The fact that it did not has left many Indians bewildered, angry and bitter. After all, they had spent long, unending hours in queues formed to exchange or deposit their outlawed and illegal money at banks. In exchange, they were promised that wealthy and venal-minded tax cheaters would no longer be able to hide from the taxman. Industrialists have gone back to their wicked ways of doing business under the table — a far cry from Prime Minister Narendra Modi’s claim that his scheme would cleanse the economy of graft once and for all.

Instead the move has levelled many businesses in India and brought down growth levels to considerable extent. The dream for a cashless economy lies largely in ruins as streetside vendors and wholesalers turn back to wads of money. The buyer is perhaps more at fault than the producer or manufacturer of goods. They insist on making cash payments and ensuring that these remain untraced.

The digital revolution has come and gone — leaving a majority of the people in economic pain. By not spending high denomination banknotes, Modi had hoped that more cash would remain in banks and be used for digital payments. But the results have been disappointing. Since December 2016, the use of digital sales has dropped by 13 per cent. Mobile banking figures are experiencing a slowdown.

Even if one discounts the massive disruption in the lives of ordinary people, demonestisation has just not been able to wean Indians from their cash addiction. Economists believe that the cashless experiment proved costly as it took human lives and livelihoods. And in the end it was not able to uncover large stashes of black money.

Published in The Express Tribune, November 9^th, 2017.

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