KOCHI: Do you think rural India is ready to go cashless today? No! The country is still very far away from being a cashless economy, says a study conducted by Kochi-based Centre for Socio-Economic and Environmental Studies (CSES) on cashless transactions.
The study reveals that 91 percent of the population in the rural areas of Ernakulam, the first in the country to achieve universal literacy and India's first financially inclusive district, has not done any cashless transaction in their entire lifetime.
Don't be surprised! It's true! Maneed, an agrarian village on the outskirts of Kochi some 25 kilometres from the district headquarters, was one of the villages taken as a subject for the study. With well plastered concrete buildings, consumer stores, small townships, paved streets, and swathes of rubber plantations, Maneed reflects the image of a developed village in God's Own Country. But when Latha (name changed), a widow who works as a private school teacher, was interviewed as part of the survey she was at a loss.
Though she has the backing of a good education, Latha is still unaware of digital transactions. Her's is not an isolated case. Only 1.6 percent of the people, who were interviewed, have begun using cashless facility after demonetization, said Bibin Thambi, who along with Jayan K M, Ramshad M, Ben Rois Jose, Aanchal Nair, Dinoop K K and Swathi Mohanan, researchers at CSES, conducted the study.
Five hundred randomly selected adult respondents from selected panchayats were interviewed during the survey. And the results were shocking, as people from various strata of the society are still reluctant to go cashless even after demonetization.
Going cashless for online purchase Even if the facilities for cashless transactions are available, their usefulness lies in the opportunity to use them. Therefore the presence of shops, institutions that make use of the cashless facility are important. Only 10 percent of the respondents reported that the shops they regularly visit have point of sale (PoS) facility. The maximum number of cashless transactions are done for online shopping (5.2%) followed by using it for buying provisions (4.2%). Buying textiles (4%), cash transfer (3%), payment of utility bill (2.4%) and buying diesel or petrol (2%) are the other major purposes for which cashless transaction is used. |
Even after being well educated, nearly half of the people are either unable to comprehend messages in the inbox of their smart-phones or are not well versed in the jargons of cashless world, says researchers, though 81 percent of the respondents use mobile phones.
The study shows that the people in the socially and economically backward sections were far behind the better off sections in going for cashless transactions. Only 3 percent of the people in the Below Poverty Line (BPL) category have used the cashless facility at least once in their life time whereas it is 13 percent among the APL category.
While only 5 percent of the respondents belonging to the SC/ST have used cashless facilities at least once, around 10.3 percent of those belonging to other categories have used the cashless facility. Only 6.5 percent of female respondents reported usage of cashless facility, whereas it is 12 percent among the males.
Though employees (both in govt and non-govt institutions), self-employed or business persons and students are on the forefront in doing cashless transactions, only a very few among the daily labourers and home makers, who forms the major chunk of the sample, have ever made any cashless transactions.
Only 2 percent of the daily labourers made cashless transactions at least once, while around 30 percent of those employed have used this facility.
Thirty percent of the students in the sample have used cashless facilities where as it is only 2.6 percent in the case of homemakers. The study also shows that only 7.1 percent of farmers and 12.3 percent of the total self-employed or business category have ever made cashless transactions. No one in the retired category has used any of the cashless transaction facility in their lifetime.
Only 2.5 percent of respondents who are 60 years and above have ever made cashless transactions, while 22 percent of youngsters have used cashless facility at least once. The frequency of usage of cashless facilities decreases with increase in age.
Educational status is also a major determinant in adopting cashless transactions. The respondents who have less than secondary education did not use cashless facility at all. Only 3.5 percent of respondents with secondary education have used cashless transaction at least once, while 47 percent of respondents who have professional education and 25 per cent of other graduates made cashless transactions at least once in their life time.
One-tenth of the respondents who have higher secondary education use cashless transaction at least once. Respondents who have not finished higher secondary make little use of cashless transaction, though 63 percent of the respondents belong to this category.
At the same time, respondents with professional education who make use of this facility more often, account for only 4 percent of the sample. The facilities that are used in cashless transactions are ATM or debit card, credit card, mobile banking, internet banking and e-wallets. Almost half of the respondents who participated in the survey have ATM or debit cards.
What's needed for cashless transaction? The basic infrastructure required for cashless transactions are bank account, mobile phone and internet. 82 percent of the respondents have an account with a private, public or district or urban co-operative Bank. 18 percent of the respondents do not have a bank account at all. Though 81 percent of the respondents use mobile phones, only half of them know how to use the SMS facility. One in three respondents have smart phones and 28 percent use internet, either in their phones or computer. |
But, only one-third of the respondents have used it at least once for withdrawal of cash or for cashless transaction. Only 4 percent of the respondents have internet banking facility while 2 percent have credit card, mobile banking, e-wallet facilities. the economy.