How has life changed after the note ban?

Recently, when Alexander James, a second-year management student from Chennai-based LIBA (Loyola Institute of Business Administration) went for a dinner with his friends, he realised how much things had changed over a year.

Earlier, when they had a similar party, the friends settled their bills by forking out cash. One of them would pull out a smartphone and calculate the bill amount per head.

Subsequently, a heap of notes and coins would be seen on the table and then duly handed over to the restaurant waiter.

Now, though, Alexander and his friends have gone digital. They use the Chillr application on their smartphone which makes splitting bills between friends an easier process. By allowing instant transfer of money (IMPS) free of cost, it enables digitalisation of transactions.

“Thanks to demonetisation, we have started using this app and it’s going great guns,” says Alexander.

“Now one of us swipes a card and the rest is taken care of by the app,” he says. Moreover, post the demonetisation process, more shops in his locality have card machines, says Alexander.

Being a student, he frequents a stationery shop and it has started accepting credit and debit cards for payments. “This has increased my debit card usage,” he notes.

His college too has moved on. Earlier, as a part of the Student Affairs Committee, Alexander had to deal a lot in cash to organise college events.

For instance, the vendors of banners would insist on cash payments, while some local hotels would charge more for cheque-based transactions. However, post-demonetisation, the college now strictly settles all the bills only through NEFT or cheque, he says.

Delhi-based Vikas Kumar, working as a media consultant, was an early adopter of online and card payment modes, but continues to rely on on cash for routine, smaller-value purchases.

Demonetisation pushed many people to go cashless, he says. Paytm was one application he signed up to — with paperwallahs and grocery shops accepting e-payment during the initial phase of demonetisation. “Those were the times when Paytm and other e-wallets were advertising and drawing customers with heavy cash-back incentives to use their apps,” he recollects.

However, with things returning to normal, Vikas has nearly stopped using Paytm. “Cash is the simplest and the most convenient mode for making day-to-day purchases.”

He, however, chooses to go cashlessand swipes a credit card for all high-value purchases. Moreover, he also continues using the digital mode for settling all utility bills.

Down south, Vinu Kurian, banker-turned cardamom farmer based in Kochi, recalls the tough days when demonetisation was introduced by the Centre.

November is peak harvest time (or the ‘picking season’ as the farmers call it) for cardamom in the region. And during these times, he usually recruits 30-40 workers, daily, at the farm, who come from nearby towns just for harvesting.

The note ban bowled him out, making it difficult to recruit labour.

“These people are not permanent labourers and therefore need to be paid wages in cash every Saturday,” he says. And cash crunch hit farming activities, including that of hiring labourers to get the critical farming activities done.

Vinu manages a cardamom farm of 12 acres. All small farmers, he says, continue to conduct 80 per cent of their farming-related transactions in cash. From buying fertilisers, payment to local drying units which process the cardamom, all is done in cash; while in the case of pesticide purchase, a minority pays the dues by way of cheque. Even today, it’s cash that rules the game.

Vinu says the initiative taken by the Spice Board, the Government regulatory agency for Indian spices, days before the start of demonetisation, has had a deeper impact on trader-related transactions.

Last year, it mandated that auction sales proceeds have to be compulsorily settled through credit of money into the bank account of the seller and not by way of cash. Before this regulation, anyone selling the commodity through an auction house could get the proceeds by way of cash, with no upper cap on the amount. And, according to sources, post such regulation, some cash-based traders don’t seem to be operating in the market.

However, ‘black is back’, in some other way, says another South-based farmer who deals with traders on a regular basis. “There are separate prices for produce; those being paid in cash get a higher price than those that aren’t.”

“Overall, business is dull and people are not spending as much as they did a year back,” says Sonny John Abraham, owner of Hindimusiclessons.com, an online music teaching portal. He reasons that the government initiative has reduced the amount of discretionary spends by consumers. “It has partially got to do with the fact that everything is monitored and is accountable,” he says.

For Vijaylakshmi Sundaram, a Mumbai-based retired government official, life after demonetisation is nothing different. She continues to get her pension in her bank account while she uses the online mode for settling most utility bills.

“A lot depends on the ‘locality’ and the ‘type of transaction,” she says. Bigger shops, in general, are not finicky about usage of credit cards. She makes it a point to have a debit or credit card at all times for all emergency purposes. “Keeping cash handy will not suffice, especially if it is needed for hospital or other related payments,” she says. For her, demonetisation has opened more avenues for making non-cash based transactions.

Dasharathan, who works as a security guard in a Chennai-based cooperative society, has fewer words to share. “My salary is credited to my bank account and I live within my means, saar ,” he says.

On how life has changed post note ban, he is unwilling to say much. Perhaps he has a bigger worry: Not earning enough cash!

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