Cash is an insignificant component of black assets
Old notes for new is not game-changer.Cash recovery has been only 6% of the undisclosed income seized from income tax evaders, according to data from tax raids from 2012-13 onwards.
What shouldn’t shock us is to learn that the poorest 58% own about 1% of India’s wealth. What do you expect when over a quarter of India lives on daily wage earnings that average Rs.272.
when 1 in 10 people survive on less than $2 a day. Inequality is trapping hundreds of millions in poverty; it is fracturing our societies and undermining democracy,” .
The report said that between 1988 and 2011, the incomes of the poorest 10% around the world increased by an average of just $65 per year, while those of the richest 1% grew by an average of $11,800 a year—182 times as much.
Where is the infrastructure for a cashless economy?
Life thrown into disarray :More than 90 per cent of India’s workforce still earn their wages in cash. These consist of hundreds of millions of agriculture workers, construction workers and so on. While the number of bank branches in rural areas have nearly doubled since 2001, there are still more than 600 million Indians who live in a town or village with no bank. Cash is the bedrock of the lives of these people. Their daily subsistence depends on their cash being accepted as a medium of valid currency.
in urban and rural areas, affecting a population of about half the unorganized labor sector of 415 million persons, who are estimated to be daily wagers.only 10% households reporting an Internet connection at home, and only 22% households having one member with access to the net, ‘Digital India’ is far from becoming a reality yet.
In the poorer states like Bihar, UP, MP, Orissa and Assam the teledensity is about 50%. The ATM density is about one for every 10,000 as opposed to one for every 3-4000 in the states like Tamil Nadu and Maharashtra with superior banking networks. Only 20% of the ATMs are in the rural areas. Development here is highly desirable, but it will take many years.
Can digital transactions help? According to the RBI, there were 26.3 million credit cards and 712.4 million debit cards in the country by the end of August this year. This is a sizeable number. But, apart from cards held by offices and shops, there are people with multiple bank accounts who have more than one such card each. Many members of one family would also be having such cards.
While the government claims the move towards a cashless economy will flush out terrorism, curb tax evasion and stem the flow of black money, in reality it has ended up compromising people’s privacy, freedom of choice and given the state unprecedented control over their lives.