(Riya Singh, Intern Journalist): Four years after demonetization, cash continues to be used for low-value transactions such as buying groceries and paying to domestic staff, according to the latest survey. In the past 12 months, among the top categories of purchases for which citizens paid the most amount in cash without a receipt were grocery (for 39 percent respondents), salaries for domestic staff (for 31 percent out of the 15,376 respondents). In fact, respondents paying cash for groceries increased from 36 percent last year. Other categories were discretionary purchases and eating out; property, rent and home repairs, etc.
PM Modi had demonetized Rs 500 and Rs 1000 currencies on November 8, 2016, to curb the black money problem that has been among the key reasons for the government to lose tax revenue. While the move was seen to be supported by people, there were implementation issues faced including inconvenience to deposit and withdraw money. While demonetization and GST helped boost digital payments in India, it was Covid that gave it a leg up as consumer started exploring and using electronic payments amid safety concerns around the usage of currency notes and coins that might act as a carrier of Covid-19 virus.
“There was an overall dip in digital payments in April and May 2020 as compared to March 2020 due to the imposition of lockdown as a measure to contain the spread of the pandemic. Thereafter digital payments have witnessed an increase with unlocking since June 2020,” Sanjay Dhotre, MoS for Electronics, and IT had said in a written reply to a question in the Lok Sabha in September. Digital payments in 2020 declined from 435.88 crores in January to 306.47 in April before bouncing back to 329.22 crores in May and 412.14 crores in June. In July it again declined to 396.48 crores only to recover marginally to 400.82 crores, as per the data shared by Dhotre.
The survey further noted that most citizens sought mandatory disclosure of assets of public officials and their families and linkage of Aadhaar to property owned as a way to further solve the black money problem in India. While 33 percent of 15,492 voters believed linking property ownerships with Aadhaar a must, another 38 percent asked for asset disclosures belonging to public officials, families.
Importantly, as the data by the Reserve Bank of India, digital payments via RTGS, credit transfers such as UPI, NEFT, AePS, IMPS, etc., debit transfer and direct debits, card payments, and prepaid payment instruments grew 135.4 percent from 1,459.02 crores in FY18 to 3,434.55 crores in FY20. The amount also increased 18.4 percent from Rs 1369.86 lakh crore to Rs 1,623.05 lakh crore during the said period.
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