Cruel Forced Cashlessness

THE PM says ‘Go Cashless.’ By destroying 86% of cash and printing Rs 2000 notes instead of smaller denominations, the Government is forcing the economy and the people to go cashless. What is the impact of enforced cashlessness on the poor, on street vendors and small shopkeepers, on citizens?

Is ‘Cashless’ Practical In India?

In most of rural India, there is no electricity, let alone internet coverage. How can the poor of India go cashless? In Kashmir or Manipur, internet and mobile phone services have been shut down in the name of security often. This has been done even in cities like Bangalore in the name of preventing racist or communal violence. In such situations how can people survive without cash?

How ‘Cashless’ Hits Street Vendors and Small Shops

Note Ban has hit street vendors and small shops hard since more and more people are forced to buy vegetables etc from supermarkets or online shops which allow for digital /card payments. It is all too likely that in a cashless economy, the well-off people with plastic money will choose to buy vegetables etc at Ambani’s Reliance Fresh or Biyani’s Big Bazaar rather than street stalls.

Can’t street vendors use IMPS, Mobile wallets like PayTM or UPI apps, as PM Modi is asking them to?

• Mobile wallets like PayTM charge you for moving your own money from your wallet to your bank account, so that people spend money received through PayTM only by using PayTM. That is an unfair cost for small vendors.


• These apps and e-wallets can charge and hike transaction fees at their whim and fancy. Even if it is 0 or 1% today, tomorrow they can hike it much higher. Basically ‘cashless economy’ places various corporate dalals standing between the poor people and their hard-earned money: earning profits on every cup of tea sold, every pav of vegetables sold, every single transaction.


• An illiterate woman could be a successful street vendor before 8 November. Now, even to sell vegetables, she would need: a) a smart-phone; b) a data-pack c) internet d) readily available electricity to charge the phone; e) various apps; f) knowledge of how to use the smart phone, data pack, apps; g) working knowledge of reading/writing English/Hindi etc; h) ability to read and typing numbers on a cell phone and i) time to do all this for each customer!


• The PM keeps calling himself a chai-wala (tea vendor). As campaigner for street vendors’ rights Vinay Sreenivasa writes: “Imagine a tea-stall owner: if he or she has to receive online payment for every cup of tea, they will have to spend between half a minute and a minute to make sure the transaction happened, whereas earlier a cash transaction would have just been a matter of seconds! And in case there is an issue where a customer insists he made a payment but the vendor does not get the notification as has been reported in several places, heated arguments ensue and clarifying from the payment gateway will take a long time- time which is crucial for vendors. Many vendors also change their phone numbers once in a while, in such a situation where the phone number is linked to the account, they need to run around to ensure that the new mobile number is linked!”


• Going ‘cashless’ means investing in a host of extra costs – including buying a swipe machine, paying for credit or debit cards, paying for a smartphone and internet, and paying transaction costs that e-wallet companies might charge. Should the poor have to invest in extra costs of this kind?


• As Vinay Sreenivasa points out: “Once street vendors start using digital solutions to receive money in the bank, they are easy prey for authorities to look at newer forms of taxes and if one wants to avoid it, one has to start maintaining record books for each transaction to show how much has been spent and how much earned! Imagine a street vendor making all payments to wholesalers in cash and then having received a payment of Rs 30,000 a month from customers. Now the profit might be only Rs 10,000 but the authorities can see only the Rs 30,000 that came in. And to show that the 30,000 is not profit but total revenue, one has to maintain records of all transactions, making it difficult especially for the poor and financially illiterate. They will not need to pay a tax under the tax slab, but to show that, they have to jump hoops!

Street vending or small shops is the last means of survival for many of India’s poorest. The Government was already trying to evict street vendors and small shopkeepers to benefit corporate retailers by bringing in FDI in retail. Now – thanks to Note Ban, the transaction time for online transactions, the cost overhead, the time overhead will all make street vending less attractive and further evict the poor retailers.

Impact on Small Farmers and Rural and Urban Poor

• If Agricultural Produce Market Committees (APMCs) and street vendors etc start receiving only online payments or will make only online payments, small farmers will be edged out by rich farmers are able to go digital


• In rural India there is very little electricity coverage. In tribal districts of Rajasthan, Odisha, Chhattisgarh and Jharkhand, there is so little electricity that people walk to nearby tehsils to charge their phone! There is so little network coverage that people walk to hilltops to make or receive calls! How can these people make digital transactions – not only to sell or buy produce but even to buy food rations in ration shops?


• What will happen to rural haats? Can we really imagine that they will go ‘cashless’?


• The Government has failed to provide farmers with power even for irrigation in all these years: will it provide them with electricity and internet now?

How Will The Poor Get Rations?

Even Modi’s own brother Prahlad Modi, President of the Ration Shopkeepers Association, has protested against the impact of ‘cashless economy’ on poor shopkeepers, and has refused to install a swipe machine in his ration shop. He has said, “Ration shops cannot be expected to bear the costs of installing a swipe machine, and moreover most people who come to the ration shop have neither credit nor debit cards.” Can’t Narendra Modi at least listen to his own brother? The Government is now saying it will pay for installing swipe machines in ration shops – but will it also provide each and every poor citizen of India with credit or debit cards and guarantee that they will get rations even if electricity or internet fails? Will the poor starve if electricity or internet is unavailable, if they do not have credit/debit cards, or if the swipe machines don’t work?

Cashless Is Neither Less Corrupt Nor More Secure

• The Government – and various corporate entities are trying to tell us that cash is bad – that cash encourages corruption. That is a lie. Nigeria is one of the most cashless economies in the world – and also one of the most corrupt. India’s cash- to-GDP ratio is not much more than that of the Euro-zone countries. Linking cash flows alone with corruption is illogical and baseless.


• By branding cash itself as corrupt or ‘dirty’, the Modi Government is trying to criminalise the entire informal sector – and therefore, the poor who eke out survival in the informal sector.


• Digitalisation is always vulnerable to hacking, theft and other economic crimes. CBI is already investigating cases of PayTM  being cheated by users. If PayTM and such digital wallets are themselves not able to secure their own money from thieves and hackers, how can users – merchants and customers feel safe about their money? Can the poorer users really risk putting their hard-earned money in such insecure wallets?

Will Cashless Payment Stop Minimum Wage Theft?

The PM says wages will be paid directly into workers’ accounts cashlessly or by cheque, ensuring that minimum wage is paid. Workers know that’s a lie! In Delhi for instance, contractors of security firms keep security guards’ ATM cards with them and withdraw money even as they are depositing the official ‘minimum wage’ amount. So minimum wage theft continues even in ‘cashless’ transactions!

Corporate Control Over Our Money

• Corporations will control how we choose to spend our money. This can result even in political censorship: some years ago, Visa, Mastercard etc prevented people from paying donations to WikiLeaks, which exposed corruption and crimes by many powerful Governments all over the world!


• Corporate control over our spending also means that we cannot protect ourselves in an economic crisis. As Vinay Sreenivasa points out: “When today we see that a bank is collapsing, we can rush and withdraw money, but if all the money is digital – how do we withdraw it? Today if interest rates come down, we can withdraw money and keep it in cash. Tomorrow, once all money is electronic – we have to suffer low or negative interest rates (as has been done in some European countries) or just spend the money! Once all money is electronic, we are giving a free hand to government to indulge in such macro-economic manipulation.”

We can either be cruel and callous and believe the PM Modi’s farcical claims that even beggars in India now have swipe machines. If we have any human feeling at all, we will know that let alone beggars, even the poor vendors and shop keepers and farmers cannot go ‘cashless.’ In France the cruel Queen Marie Antoinette, seeing starving people demanding bread, asked, “If they don’t have bread, why don’t they eat cake?” Mr Modi, the Indian Marie Antoinette, is saying about India’s poor, “If they can’t get cash, why don’t they just go cashless?” Let us not be like Marie Antoinette or Modi. Let us recognize and resist the forced ‘cashlessness’ as a war on the poor.