Moving to digital currency – a necessary Transformative shift

Today I went to a Barber shop and asked him if he would take money digitally –  Paytm, Credit card, Debit card, Net banking instant pay… by any digital means?

For this the owner said if you want all those facilities then go to a ‘HI-FI’ parlour… not here. I am a simple man with a small shop!

I said what’s small about this place? You have capacity of 5 seats, 600 sqft of space, AC, TV, you are a rich man yourself… this is hi-fi by any standards.

He said we have always been accepting only cash why change now?

To that I asked, Do you have mobile phone? he said yes, do you have Facebook account? He said yes… then I asked him was he born with these? No right! These came now and we have adopted them. Mobile wallets have come now and we can adopt them too!

The guy left furious… and the staff there said not to piss the guy anymore … he had’t paid the staff salaries for some time now… and is very pissed with Modi for the action.

I think it’s time we move to digital payments. Hard cash has to be killed because it’s not an efficient way. Of course it need not be a Knee-jerk reaction. We could do it in steps.

  • Most shops that we see run their business in black. We need to give them a dignified path to get to mainstream. Like Gandhi said ‘Paap se gruna karo; paapi se nahi’ we cannot penalise the sinners; the crusade is against the sin and not sinners.
  • Digital in rural areas will take more time – we need to subsidise and create better reach. This is painful and long drawn process but its possible! Mobile payments can be pushed to rural areas. We need a leader and a ministry dedicated for it.
  • Labour payments is a big chunk of cash payments. Jan-dhan has been successful but not sufficient. The barber I met today didn’t have an account! We need an overhaul of labour laws and get most labour into organised sector.
  • People don’t solve problems. They crib. A strong change management is required to move the country.
  • People who are found guilty need to be told how govt. is going to deal with them. There should not be any ifs and buts. Financial offence is not criminal offence. We need to deal with financial crime in ways its constitutional.

Country has cancer and it will be painful to get rid of it. Black money is building more black money. Ability to play a business in black is a competitive advantage and govt. has to ensure this advantage is not given to players. It’s fuelling many bad things like money for vote, terrorism, bad infrastructure. It’s killing the country. Country has to go through hard times to get cured.

It’s not like cancer patients did some sin – but they have to still go through it all. Similarly most poor people don’t have enough money to be eligible to pay tax and there is no chance for them to have black money – yes its unaccounted but even if one accounts for the same there won’t be any money that is taxable. But they will have to go through the pain of standing in queue for money. Banks have capacity optimised for regular transactions and in situations like this banks will not be able to provide service that easily. They too have limited resources. But they are doing their best.

One last argument, which didn’t take place but is usually discussed is that… I shall pay tax but the govt. is misusing the money. Agreed, govt. is not using the money prudently and there is corruption. But things have to move from worst to bad. We need to take that battle too. We need to hold Govt. more accountable too. Not paying tax is not the way because if everyone did that, we won’t have defence and we won’t have anything. India is a nation where the culture is to think about dharma and our dharma is to pay tax. Our dharma is also to hold the govt. accountable and efficient and effective.

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