Why cash is still king
Ahead of the first anniversary of demonetisation, Mirror checks into four `cashless’ villages across the country to sift fact from fiction

One of the central government’s many stat ed (and often shift ing) objectives of demonetisation was to push India towards a cashless future. In the absence of physical currency, digital transactions would be unavoidable, and eventually become not only a preference but a habit. While the intent to go digital existed earlier ­ Akodara in Gujarat was reported to be a fully digital village in July 2015 ­ it was presumed that the audacious destruction of 86 per cent of India’s cash on 8 November last year would stand as a point of no return. However, as we approach the first anniversary of demonetisation, reality, as is its wont, appears to be more complicated. Cash is reportedly on the rise again as network problems and a lack of credit and debit cards remain hurdles across the country, with the result that the rate of growth in digital transactions has returned to pre-demonetisation levels. Recently, Mumbai Mirror visited four villages located in the south and west of the country that were hailed as examples of the future to find out whether digital has retained its stronghold, or whether reports of the death of cash have been greatly exaggerated.Dhasai, Maharashtra `Where are the debit cards to do cashless business?’

ABOUT a year after Dhasai, in Murbad, Thane, was proclaimed as Maharashtra’s first digital village, government officials are faced with a formidable and decidedly embarrassing problem. The villagers have not been equipped with debit cards by the three banks that operate in the region. This is why there is now a scramble to herd them into camps and distribute the cards. Once that is sorted, the officials will have to deal with as big a problem in and around Dhasai: internet connectivity. The tehsildar Sachin Choudhary, though, hopes to get a grip on things soon. Earlier this week, he held a meeting with traders, bankers and other stakeholders to overcome the problems. While about 27,000 people from the area bank with the Thane District Central Co-Operative Bank, it has issued cards to only 2,500 custom ers. Similarly, out of Vijaya Bank’s 10,000 customers, only 2,500 have been issued debit cards. “About 3,000 of our customers have got Kisan Credit cards,“ says Ashok Warghade, who heads TDC’s Dhasai branch.Choudhary, though, appears hopeful of resolving the snafus. There are plans to talk to Bharat Sanchar Nigam to increase the internet bandwidth to facilitate smoother and faster digital transactions. Dhasai, Choudhary informed traders and bankers, will soon be covered under the National Optical Fibre Network. While about Rs 5 crore has been spent on improving roads in and around Dhasai ­ and it shows ­ very little thought has gone into putting the region on the digital map. Only about ten of the 65 traders who were given Point of Sale machines (PoS) by Bank of Baroda last year still use them. Swapnil Patkar, a grocer and the leader of a traders’ union, told Mirror that there is no point equipping establishments with PoS machines without first tying up the other loose ends. “A large chunk of population here is Adivasi, and banks have not provided them debit cards. Secondly, one simply can’t rely on the network.It simply disappears from time to time.

This is not the way to encourage digital payments.“

The digital push in Dhasai was spearheaded by NGO Swatantryaveer Savarkar Rashtriya Smarak, and was backed by the state government. Its chairman Ranjeet Savarkar, grandson of Vinayak Damodar Savarkar, says that the idea is to take small steps.“Whatever we have achieved in last ten months is a small step towards a cashless village. I don’t think it is a failure. We never claimed that the village will become cashless overnight. We are identifying the issues and slowly bringing solutions,“ he said. –ALKA DHUPKAR


Mori, Andhra Pradesh “There is always a network problem’

ABOUT a year ago, Andhra Pradesh chief minister Chandrababu Naidu declared Mori the state’s “first village with 100 percent digital literacy“.Naidu is also the head of the 13-member NITI Aayog Committee for Promotion of Cashless Society and Digital Economy, but the prosperous little village, where people mainly grow cashew nuts and coconut, couldn’t care less. None of the 22 shops in the village entertain digital payments.Even the public distribution system dealer is averse to accepting digital payments. “Most of the time, there will be network problem. It causes a lot of inconvenience to both customer and shopkeeper,“ said Vungarala Bhaskara Rao. This is despite each household in the village being provided telephone and internet connections via the AP Fibre Grid for Rs 149 a month, in line with Naidu’s proclamation to “change all villages into Smart villages in a phased manner“. The sarpanch of Mori, K.Jhansi Lakshmi Bai, is brutal in her assessment of the government’s attempt at going digital. “I don’t do digital transactions. The initiative was launched without any kind of preparation. It has clearly failed.“

Cashew exporter Naresh Naidu said initially people were enthusiastic about the digital transformation that was being effected in their village. “We were taught to pay utility bills online and buy bus, train and cinema tickets -all cashless.But the real colour of digital economy became known very soon. Many of us got notices from the Income Tax Department to furnish sources for our cash deposits beyond Rs 3 lakh.“ A month or so later, three villagers became victims of online fraud, and it went downhill from there. “I remember they gave us smartphones for about Rs 1,500, but they stopped working within a week.And they forced us to use the RuPay card ­ I don’t know where it is now,“ said B Subbalakshmi, who is the member of a women’s group in Mori. The villagers also abandoned their Jan Dhan bank accounts in no time. “About 3,000 of them switched to regular savings accounts as the restrictions on withdrawals from Jan Dhan accounts do not suit them. Our efforts to encourage digital transactions by restricting daily withdrawal limit to Rs 20,000 seem to be yielding negative results,“ said K Rajesh, the branch manager of Vijaya Bank in Mori. TVSG Kumar, the nodal officer of the digital initiative in Mori, is already thinking of a plan B. “We tried our best, but, people say there is no incentive. We are discussing how to revive and sustain the movement.“


Akodara, Gujarat

“Many people here don’t want this’

IN JANUARY 2015, Akodara, India’s first digital village, was dedicated to the nation by prime minister Narendra Modi. The village was adopted by a private bank, which set up the digital infrastructure and imparted financial literacy to its 1,100-odd residents. But, on a pleasant afternoon earlier this week, shopkeeper Jayanti Patel is paying his supplier in cash. Even as he acknowledges the convenience of going digital, he tells you why things haven’t really taken off. “During demonetisation, we were much better off than other villages. But the truth is that only 15 to 20 per cent of payments happen digitally. Many people in the village don’t want this. My suppliers, for instance, don’t keep swiping machines.“ Akodara presents an interesting contrast of urban markers in a rural set-up: lush cotton fields, solar street lights, fancy cars, an ATM. And, one gets the sense that people are mostly happy with cash. This is despite the bank’s efforts to encourage payments via SMS, nearly all of the residents holding bank accounts, and free Wi-Fi (for a year from 2015). SMS transactions have reduced by half since 2015, says sarpanch Chintan Patel. “That’s because the transactions cost a rupee each. Then, the neighbouring villages are not as digitally enabled, so we are forced to carry cash. Until villages around us get similar infrastructure, all this is not of much use.“

Some of Akodara’s residents feel that there are other things the government should be looking at. “I don’t use a mobile, my sons do digital transactions.But the BJP government has not done much for farmers in Gujarat. The prices of groundnut and cotton have not changed in years, while the fertiliser prices have risen threefold,“ says PB Patel, a former government employee who took up farming after retirement.Not surprisingly, the digital push does not figure in conversations around politics and the upcoming assembly polls. “I supported BJP, but they have not done anything for us. I believe there should be reservation in studies but not in jobs.Recently some 200 jobs were opened up for government teachers and OBCs got reservation in that -how is this fair to others?“ said Chintan Patel.


Khandalavadi, Villupuram, Tamil Nadu

“We still don’t have an ATM“

A YEAR after being declared a digital village, Khandalavadi, in Villupuram, still does not have an ATM. The villagers believe that while a location has been chosen for it, the authorities ­ by which they mean State Bank of India officials, who `adopted’ Khandalavadi ­ are a bit iffy about it. “This is a peaceful village, and it has people of Reddiyar, Konar and Gounder castes. But the ATM is supposed to be near the Dalit colony, and we’ve heard there are concerns that it could be damaged,“ said M Thandavarayan, a farmer. But going digital is the least of their worries, said Thandavarayan. The nearest government hospital is about 3 km away, he said, and the closest private hospital is about 20km, an hour’s drive from the village.

K.Mathialagan, chief manager of State Bank of India’s agricultural development branch in Villupuram denied that caste had a role to play in the delay in installing the ATM. “The bank selected the village for the `cashless’ programme since the villagers were found to be prompt in repaying crop loans. But, since many villagers were given PoS machines, the ATM plan has been put on hold. Maybe, later on, if the need arises, it can be considered.“