MY RAILWAY SEASON pass is bought from an app called UTS with a very tiresome mode of paying that involves transferring money online to something that they call an R-Wallet and then deducting the money from that. It could be simpler, but, even so, there is no cash involved. When I order food, I use Swiggy or Zomato. No money changes hands. If I have to travel by road, I have Uber. I buy groceries through Big Basket or Nature’s Basket. Recently, I bought a Jala Neti pot to irrigate my nasal passages on an online store that sells yoga products.
In the last two years, I have seen the inside of a bank just once when I was asked to do a KYC (know your customer) check. Sweden, they say, is cashless. So am I in Mumbai… almost. The difference between me and a Swede is that as soon as I interact with the poorer social strata, cash becomes essential. The domestic help, the temporary driver who I hire twice a week, the laundry man, the watchman who washes the car, the tips that I give to the man who delivers from Big Basket or Amazon, the local bhelpuri hawker—these are mostly the only occasions I need cash. That will also change. All of them have a working bank account and the next mobile they buy is going to be a smartphone. The maid servant of a friend takes her salary online and remits it directly to her native place in Bihar. There is however one more level of the poor even below, the vast ocean at the bottom of the rung, who live under flyovers and in rural villages, who are far away from the cashless society. Forget a card, they don’t even have a phone. But their condition too will not remain static. If India continues to grow even at a moderate pace, they will be pulled above the poverty line sooner than we think.
A cashless economy is inevitable; the question really is how soon we manage to reach it. The middle- class is firmly on its way. The challenge is to pull the rest along. The prerequisite for this is to get them into the banking system. This is important for obvious reasons, from transfer of cash benefits to giving them direct access to the economy without middlemen. How does the present demonetisation help? Because it has aroused fear and that is a powerful incentive. The feeling that paper currency has no sanctity might make for bad economics, but it is powerful enough to create awareness of alternative concepts like mobile wallets and Rupay cards. Fear and greed work well to force technological literacy. Uber and Ola have already done this with taxi drivers, organising them around a digital interface. If the chaos and trauma of demonetisation push people to go cashless, then it is a good fallout.