Digital payments via RTGS, credit transfers such as UPI, NEFT, AePS, IMPS, etc, debit transfer and direct debits, card payments, and prepaid payment instruments grew 135.4 per cent from 1,459.02 crore in FY18 to 3,434.55 crore in FY20, as per the RBI data.
Four years after demonetisation, cash continues to be used for low-value transactions such as buying groceries and paying to domestic staff, according to the latest survey by community social network LocalCircles. In the past 12 months, among the top categories of purchases for which citizens paid the most amount in cash without a receipt were grocery (for 39 per cent respondents), salaries for domestic staff (for 31 per cent out of the 15,376 respondents). In fact, respondents paying cash for groceries increased from 36 per cent last year. Other categories were discretionary purchases and eating out; property, rent and home repairs, etc.
PM Modi had demonetised Rs 500 and Rs 1000 currencies on November 8, 2016, to curb the black money problem that has been among the key reasons for the government to lose tax revenue. While the move was seen to be supported by people, there were implementation issues faced including inconvenience to deposit and withdraw money. While demonetisation and GST helped boost digital payments in India, it was Covid that gave it a leg up as consumer started exploring and using electronic payments amid safety concerns around the usage of currency notes and coins that might act as a carrier of Covid-19 virus.
“There was an overall dip in digital payments in April and May 2020 as compared to March 2020 due to imposition of lockdown as a measure the contain the spread of the pandemic. Thereafter digital payments have witnessed an increase with unlock since June 2020,” Sanjay Dhotre, MoS for Electronics and IT had said in a written reply to a question in the Lok Sabha in September. Digital payments in 2020 declined from 435.88 crore in January to 306.47 in April before bouncing back to 329.22 crore in May and 412.14 crore in June. In July it again declined to 396.48 crore only to recover marginally to 400.82 crore, as per the data shared by Dhotre.
The survey further noted that most citizens sought mandatory disclosure of assets of public officials and their families and linkage of Aadhaar to property owned as a way to further solve the black money problem in India. While 33 per cent of 15,492 voters believed linking property ownerships with Aadhaar a must, another 38 per cent asked for asset disclosures belonging to public officials, families.
Importantly, as the data by the Reserve Bank of India, digital payments via RTGS, credit transfers such as UPI, NEFT, AePS, IMPS etc, debit transfer and direct debits, card payments, and prepaid payment instruments grew 135.4 per cent from 1,459.02 crore in FY18 to 3,434.55 crore in FY20. The amount also increased 18.4 per cent from Rs 1369.86 lakh crore to Rs 1,623.05 lakh crore during the said period.