Seeing a spike in the digital transactions after the demonetisation, Telangana continues to be in the upward trend though cash has come back into the system.
Notwithstanding the reports that digital transactions have lost their steam with the cash flow improving gradually in the last one year, the State continues to hold lead position in digital transactions.
The Reserve Bank of India data shows that while the value of digital transactions in the country was ₹94,000 billion in November 2016 it rose to ₹1,49,000 billion in February 2017. Even if one assumed the card transactions went up due to compulsion in the face of cash crunch, the value of digital transactions was ₹1,24,706 billion in September this year even with good cash flow back into the system.
It goes to show that people are becoming comfortable in digital transactions across the country and Telangana is leading among the States with 11,595 transactions per thousand population and in Andhra Pradesh it is 8,200 transactions per 1,000 population, according to official sources. In Telangana, 400 villages were totally digitised besides Chief Minister’s Siddipet constituency and with the Government being firm with the banks to achieve 100% seeding of Aadhaar numbers with individual bank accounts, cashless transactions will become more of a norm, say officials.
At the time of demonetisation, Aadhaar seeding was at about 55% and now it touched 93% and the remaining 7% is expected to be completed by year-end, they say.
Telangana right from the beginning took demonetisation seriously and because of efforts of the State Government, and enabling infrastructure including more number of PoS machines, the digital transactions got a boost, sources said.
However, across the world cash transactions and cashless transactions always co-exist. “Singapore is leading in digital transactions with 61% cashless transactions. In Netherlands, it is 60%, Canada-57%, USA - 45% and China -10% and India at 2% now is expected to see an increase in its cashless transactions in the coming days.
Admitting that small business establishments still charge Merchant Discount Rate of 1.5% on consumers thus discouraging them to use cards, officials indicated that efforts were on to reduce the MDR to encourage more digital transactions and bring transparency into the system.
