Mumbai: The Covid-19 pandemic in India seems to have pushed people in droves to move to a digital economy way more than the ill-conceived demonetisation of late 2016 and markedly reduced the use of black or unaccounted money in the economy.

As per a survey by community social media platform LocalCircles, the number of people who continue to prefer cash transactions has halved in 2020 from 2019 because the Covid-19 pandemic drove people stuck at home for the lockdown flocking to online stores for everything from food, medicines to clothes.

The survey took the responses from 15,000 individuals across 300 Indian districts.

“There has been a 50% reduction in the number of people who do the majority of their monthly purchases without receipt in 2020,” the LocalCircle report said. As much as 14% of citizens in 2020 reported saying “50-100 percent” of their monthly purchases on average were made without a receipt, a fall from 27% in 2019. This shows that there has been a 50% reduction in the number of citizens who do the majority of their monthly purchases without receipt in 2020.

The survey also found that not only has the quantum of digital transactions gone up, even the type of transactions have widened. Respondents said they only used cash while paying salaries of domestic staff or eating out. Only 3% respondents said they paid cash while paying rents, buying properties or paying for house repairs. Interestingly, 7% respondents said that they paid “bribes” in cash.

“Over the years, India has witnessed a tremendous rise in the usage of digital payments, which has eventually led to an increase among consumers getting a digital receipt to their purchase,” said Sachin Taparia, chairman of LocalCircles.

The RBI data published in October this year suggests that in FY20 India witnessed a massive rise in volumes of digital payments to 3,434.56 crore. In five years, digital payments saw an annual growth rate of 55.1% in terms of transaction volumes and 15.2% in terms of value. In October, the UPI-based payments hit a new milestone with 207 crore transactions, LocalCircles said.

Respondents pointed to various areas where illegal economic activities were rampant. As per the respondents linking all property ownerships with Aadhaar, mandatory disclosure of all assets of all government ministers, employees and their family members, demonetising Rs 2,000 currency notes and levying transaction tax could further reduce the black money economy.

“Experts argue that black money is back again in the system and demonetisation only managed to reduce the supply of it for a few years. Although demonetisation brought digital payments into mainstream in the country, the GST rolled out eight months later enabled it further, but it has really been the Covid-19 pandemic that has accelerated it,” the survey said.

Source link

LEAVE A REPLY

Please enter your comment!
Please enter your name here