Wednesday, 23 November 2016

Is this a Fast Forward into Digi-Economy?

image from shutterstock

On November 8, 2016, Prime Minister Narendra Modi in an address to the nation announced the decision to demonetize the 500 rupee and 1000 rupee notes. Almost twenty days later, the queues are shorter and we are limping back to normalcy. At the outset, demonetization, has given rise to mixed reactions, some felt a surge of patriotism and relief and on the other hand some people were just frustrated, angry and dissatisfied with the hastiness of the government.

Let’s face it, the matter has been ruminated ad nauseum and yet newer aspects emerge, everyday. To say the least, Government’s decision to demonetize the most widely used denomination is inconvenient to many yet it is perfectly constitutional (Supreme Court has upheld the validity in Jayanti Ratanchand Shah vs Reserve Bank of India & Ors. 1996 SCALE (5)741). Nevertheless, the implementation of the scheme can be questioned/reviewed/looked into by the Supreme Court.

With all the media advice to go online and use e-wallets, the ground reality is quite different. A majority in India are yet to place their trust in such e-wallets. Reports suggest a surge in online activity and signing up by many first-time users of such e-wallets in the wake of demonetization. Payment Banks such as Paytm and Freecharge are obligated to follow RBI guidelines and follow cyber security rules. Investment in government securities and adherence to cash reserve ratio (CRR) and statutory liquidity ratio requirements set by RBI lend credence to these companies. Some companies have PCI DSS 2.0 certified (payment card industry data security standard) and use VeriSign certified128 bit technology. The Verisign is a 128-bit encryption technology that ensures that the information that is entered is sent into a secure socket layer (SSL) and is encrypted to protect against unintentional disclosure to third parties. Thus, keeping it a safe platform for transacting money.
Although there are measures that are being taken by the government and the RBI and also the companies themselves, there have been some major concerns with respect to cyber security and frauds especially in the present situation of chaos and confusion.

The question which stares us now is whether we assist the implementation of this scheme and take this odd ball thrown by the Government in our stride or whether we cry foul over the boldest move yet against corruption and black money.
To a nation which is comfortable with Watsapp, from the milkman to the high flying executive, from the autorickshaw driver to the medical store assistant, from a teenager to a senior citizen, why is accepting a digital life so difficult. With smartphones in every hand, life without physical currency is just an app away.
Though the pros definitely outweigh the cons, in hindsight, the Government may have overlooked a few aspects such as the logistics involved in maneuvering cash, the Opposition circus, and the media laugh riot. Hopefully, it has correctly estimated the people’s patience.

Demonetization stands testimony to the fact that in a democracy, real progress can happen only when people cooperate.

Let us hope the public spend on frivolous things melts away and we are successful in bringing predominantly cash-only services like religious and ritualistic services and catering into the ever widening IT Net. Definitely elections will be cleaner and weddings will be simpler.

And finally, miscreants who pelt stones in riots and work as mercenaries will have to look for alternative cash (or card) cows (sic).