PM Modi Sold ‘Cashless’, So Why’s There a Rs 1.25 Cr Cash Influx?
Despite a high-decibel campaign to go cashless, the cash in the economy has only increased – by Rs 1.25 lakh crore.
Translation: Srishti Tyagi
Video Editor: Ashutosh Bhardwaj & Vivek Gupta
The Reserve Bank of India's data present a startling picture when it comes to cash. After demonetisation, the government promised to make the economy cashless, but according to RBI, the cash in the system has in fact increased by 1.25 lakh crore in one and a half years.
In November 2016, post demonetisation, the economy had Rs 17 lakh crores of cash. At the time of note ban the government announced that India will switch to cashless transactions. Prime Minister Narendra Modi advocated cashlessness in several programs and rallies.
The Central and State Governments also initiated many campaigns and launched Apps to encourage this cashless society.
Many government departments were ordered to digitise all the transactions by introducing Bhim App with huge campaigns on digital transactions – but the cash in the system continued to increase.
According to the Reserve Bank's April 2018 report, the cash in the system has now increased to Rs 18.25 lakh crore. After the ban, we have seen an increase of Rs 1.25 lakh crore in cash in just 18 months.
Still Relying on Cash
In reality, it looks as if there is an increase in cash transactions. This was proved where ATMs went dry in many states. So many banks ran out of cash that RBI had to come to their rescue.
According to the latest Economic Times report, the government had a target of 25 billion digital transactions in 2017-18, but only about 55% of the transactions have taken place in the first 10 months of the financial year.
There’s been no cashless economy despite the hype.
80% of Indians have Jan Dhan Bank accounts, and government subsidies are going straight to these bank accounts.
According to the Reserve Bank of India, there are about 77 lakh credit cards and 62 million new debit cards between 2017 and 2018. There are currently 3.75 million credit cards and 86.1 crore debit cards in the country.
Despite all this, the steady increase in cash transactions shows that the efforts of the government to make the economy cashless have more or less failed.
(This story was first published in Quint Hindi.)
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