Only 2.5 million in rural India have gone digital after demonetisation | india-news | Hindustan Times
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Only 2.5 million in rural India have gone digital after demonetisation

black money crackdown Updated: Dec 23, 2016 00:50 IST
HT Correspondent
Cashless transactions

Shabir Ahmed Lone, a grocer in Lanura village in Jammu and Kashmir, has Paytm app on his smartphone but says that villagers are still using cash.(Waseem Andrabi / Hindustan Times)

More than half a million volunteers helping job seekers in different rural schemes now have a new target: To enrol people and shops in e-economy and train them in cashless transactions.

And despite an incentive of Rs 100 for making each village shop accept any form of digital payment, volunteers across India are facing a daunting task.

So far, just 55,000 merchants have gone digital and 2.5 million rural Indians enrolled in cashless transactions after the government recalled Rs 1,000 and Rs 500 notes on November 8, said a senior member of the Amitabh Kant-led task force to push cashless economy.

The Hurdles
  • e-wallet needs internet/smartphone, has limitations of balance amount and gives no interest
  • Smartphone penetration is just around 30%
  • Shortage of ATMs
  • No grievance redressal for e-payment-related issues

“We have asked the National Payment Corporation of India (NPCI) to ease formats of two payment systems — USSD and UPI. In villages, people prefer fingerprints over other security features and it will help in higher rates of enrollment,” said Amarjeet Sinha, rural development secretary.

But even the rural development ministry’s own set-up for cashless economy needs major improvements. Out of the 1.1 million active workers of the Centre’s rural job scheme — Mahatma Gandhi National Rural Employment Guarantee Scheme — just 34% have an Aadhaar-linked bank account.

This comes amid a strong push for cashless economy by Prime Minister Narendra Modi — a decision criticised by the Opposition as anti-poor.

Now, the rural ministry has set an ambitious target to get Aadhaar-linked bank account in another 35 million job accounts.

But mere enrollment will not be enough, as opportunities to transact cashless is still limited. In a review meeting, the Kant panel found that out of 160,000 ration shops in the country, only 35% had machines to identify biometrics of MGNREGA workers.

“But there is a massive interest among people, particularly the rural youth, to adopt new ways to go cashless,” said Sinha.