Digitization, demonetization a cruel joke with illiterate population

Demonetization and the slogan of digitization that shook the population of the country in November last year with promises of a rosy future has turned out to be a cruel joke for the people in India where internet subscribers are about 25 per cent of the total populace. The government decided overnight to go in for demonetization with not much preparation for the after effects of the move. People were forced to go to banks to exchange the old, redundant currency notes. There were long queues outside banks where exchange was not possible due to paucity of the new currency in the denomination of 500 and 2000 rupee notes. The government had not given it a thought as to the amount of the new notes that would be required to replace the old currency and therefore the whole process led to chaos.

The excuse given by the government for demonetization was to check the unsurpassable amounts of black money in circulation. The government claimed that it would affect adversely the stone pelters in Jammu and Kashmir who will not be able to get finance for their evil designs. Similar claim was made for terrorist funding saying that the new currency could not be counterfeited.

It was at that point of time that people were asked to go in for cashless transactions using their debit or cash cards. But not realizing that debit cards were functional only in areas where there was internet connectivity. Say 200 kilometers from the Capital none were able to use their debit cards or other cash cards due to none availability of internet connections. There were instances where people in small towns were forced to use cash cards which did not function due to lack of internet connectivity. Moreover, debit cards or other cash cards could be used by literate people, illiterates were totally lost. In a state like Uttar Pradesh which has a population of 223 million and a literacy rate as low as 66 per cent, how could one expect usage of cash cards or debit cards.

Even several people in the national Capital till date do not know how to use an ATM card; when to enter the PIN and not to disclose the PIN to a stranger. There are a large number of people in the city who do not use debit cards because they are unaware of the usage and benefits.

Shops and retail establishments were advised to propagate and promote the usage of cash cards or debit cards and go cashless, but did the government realize how many shopkeepers were willing to accept the card payments? The ‘kirana’ (general merchants) stores in the local markets refused to accept card payments and continue till date to insist on cash.

Bank accounts were opened for a large number of people, but they were ignorant of the usage of a debit card and the ATMs.

The government never insisted on the cash card acceptance by the ‘kirana’ stores, so as not to lose popularity among the shopkeepers and petty retailers who were largely in favour of the ruling Bharatiya Janata Party. Small time retailers who make thousands every day in regular sales refused to budge from cash to cashless. Local shopping centres all over the city had several shops that insisted on cash payments only putting people to more inconvenience than the demonetization itself.  

It took as long as six months for the banks to start conducting business normally. During this period of time people were put to several inconveniences. These people included those who never had a bank account or a debit card. They were forced to open a bank account and deposit all their money into the banks thereby raising the bank deposits and causing inconvenience to thousands of people. These people were largely illiterate and came from the lowest strata of the society. They could do nothing but to grumble on the government policies.

Both, demonetization and digitization, led to a dip in sales and thereby leading to a dip in manufacturing activity too while the government continued to harp on the benefits of both the steps.

Those who made a quick buck in this period of time were the smart companies managing cash cards. The middle class was the first to go in for cash cards of different companies pumping in large amounts of cash into the coffers of these private cash card companies.

Who benefitted? Of course, the cash card companies and not the common man who was made to carry the burden while the private cash card companies made money.

The act of demonetization did not lead to the desired effect; that of checking black money. For a short duration of time there were some raids conducted by various departments and recoveries done of unaccounted wealth, but this did not last long.

Demonetization seemed to be an election stunt before the polls in the biggest State – Uttar Pradesh. It has not brought about the desired changes except benefitting the BJP. In fact, it has caused a lot of extra expenditure to the exchequer like changing of ATMs and cash deposit machines to be able to ‘recognize’ the size of the new currency notes.

The government, in the meanwhile, continued to pat its back for the two major steps. This, at a time, when the International Labour Organisation (ILO) warned that the number of unemployed in India was set to rise by one lakh in 2017 and two lakh in 2018. The ILO predicted that the number of jobless will increase from 17.7 million in 2016 to 18 million by 2018. The government seemed to have overlooked this warning by ILO and is busy in diversionary tactics.

Digitization in this country will take some years as the reach of the internet is too low and thereby limiting the use of cash cards and debit cards in smaller towns which continue to deal in cash and do not trust the cards.

The government must not ignore the attitude of the ‘kirana’ shopkeepers in insisting only on cash. Are they the favourites of the government because many of them owe allegiance to the ruling BJP or its allies?

 

 

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