A bank employee applying ink to a customer on exchange of 500 and 1000 rupee currency notes
Even as most Indians think that the Narendra Modi government's move to demonetise Rs 500 and Rs 1,000 currency notes to flush black money out of the system is a good step for the economy, not many feel India as yet is ready to become a cashless economy.
Over 60 per cent of respondents to a Business Standard poll on whether India could go cashless said the country could not. Till now, 732 people have taken the poll. The question assumes significance against the backdrop of the Centre's demonetisation
move rendering a vast number of people cashless, and the prime minister's statements on the benefits of increasingly moving to digital means for cashless transactions.
While 37.23 per cent respondents to the BS poll felt India could indeed transition to a cash-less economy, 2.06 per cent could not say either way.
The Modi government, for its part, is very keen to see the country gradually transitioning to cashless transactions, ostensibly in an effort to curb the menace of black money flowing into the system. Its flagship scheme, the Jan Dhan Yojana, was linked to the Aadhar identification and mobile banking to facilitate this envisioned move towards a cashless economy.
Speaking on Friday while laying down the foundation stone of the All India Institute of Medical Sciences in Bathinda, Punjab, Prime Minister Narendra Modi again encouraged people to switch to digital transactions. PM Modi urged the Indian masses to use their phones for transaction. "Your mobile phone can be turned into your bank and wallet. Today’s tech can help you use it for purchasing things, making payments," said Modi. However, how practical such a transition would be remains to be seen.
According to statista.com
, 684.1 million of India's total population of 1.252 billion are mobile users in 2016. Of these mobile users, only 29.8 per cent use smartphones
. Further, India's network and mobile internet penetration is still lagging. Further, as of October last year, a PwC report showed that India's unbanked population still stood at 233 million, suggesting that much remains to be done before people can be onboarded on to the digital bandwagon.
Will it reduce corruption?
The all critical question: Will the hardships being faced by all and sundry lead to a payout in reduced corruption and a blow to black money holders? A large part of the respondents to the Business Standard survey do think so — 69.44 per cent of the 540 people who took this poll felt the government was on the mark with demonetisation
and corruption and black money would see a reduction. Only 25.93 per cent disagreed with the government's claim that this was a master stroke against black money. Of the respondents, 4.63 per cent were undecided on the efficacy of the policy.
But will the policy really curb black money? In a Business Standard column earlier this month, A K Bhattacharya explained: "It will certainly flush out a good chunk of black money hoarded in currency notes of such denominations (Rs 500 and Rs 1,000)." (Read more
Further, he said: "Black money generation will not be eliminated completely, unless the government takes effective measures against several other sources of black money, such as real estate and elections. There are also no adequate incentives for people to switch over to plastic or electronic money. On the contrary, using credit cards can often force a buyer to pay an extra fee over and above the market price of a product or service. The government would do well to create incentives for people to use more plastic money or electronic wallets."
To another Business Standard question on whether the government's move was politically incorrect, 75.1 per cent respondents did not think so. The poll was taken by 518 people. Of the respondents, 22.97 per cent thought there would be negative political consequences for the government and 1.93 per did not have a clear view on this.
According to a nationwide survey conducted by C-Voter, 80-86 per cent Indians admitted to the inconvenience caused but hailed demonetisation
as a great move in the direction of combating the black money menace. (Read more
The survey conducted on Monday among half the parliamentary constituencies in India by C-Voter, an international polling agency, showed that 86 per cent respondents in urban and rural areas said the inconvenience was totally worth it. However, the Modi government's decision was endorsed the most by higher-income groups, with 90.6 per cent of them saying the move was good. Only 12.6 per cent respondents across income groups thought the difficulties caused were an "unmanageable disaster".
The Centre has been facing a backlash from Opposition parties, which have united to condemn demonetisation. Critics have labelled the move unplanned and hastily implemented. Nevertheless, according to the survey, a broad consensus emerges that demonetisation was 'well implemented'. This sentiment was common among 71 per cent of those surveyed in urban areas, 65.1 per cent in semi-rural zones and 59.4 per cent rural parts of the country.
According to 38 per cent respondents in urban, 35.5 per cent in semi-urban and 36.8 per cent in rural belts, the problems caused by demonetisation are "little, easily manageable". Also, 55 per cent respondents do not want the prime minister to succumb to political pressure and roll back this courageous move.
How have people fared, financially?
On a less policy-concerned note, Business Standard also asked respondents whether they had been facing a cash crunch since the demonetisation move. The long queues outside banks and ATMs, and the desperation clearly visible among the people rushing to get their hands on the new currency notes or Rs 100 notes might make one feel that there's an acute dearth of cash in Indian households.
However, surprisingly, only 34.7 per cent of the 683 respondents to that poll said they had faced such a problem. At least 65.3 per cent people seemed to have faced no hardship.
Were the government's preparations adequate?
Business Standard's poll on this issue asked people if the government had demonetised Rs 500 and Rs 1,000 currency notes without adequate preparations. Even as banks and ATMs ran dry of cash and the queues outside stretched on, even weeks after the move being announced, 50.78 per cent of the 1,341 respondents said that was not the case. This was closely matched by 44.37 per cent saying that preparations were indeed not adequate. Those undecided were 4.85 per cent of the respondents.