The government has been shifting the goalposts of demonetisation from black money elimination to greater tax realisation and finally digitisation to suit its arguments from time to time for justifying the mindless decision, whose parentage is being disowned by every party involved. Prime Minister Narendra Modi who had at one stage staked even his survival later on dropped it like a hot potato and passed the buck to the Reserve Bank of India as it became clear that the whole thing was a fiasco. His strategy has now received institutional endorsement with the Supreme Court pronouncing that the decision was preceded by due consultation processes. While most objectives admittedly remain unachieved, the ruling party, the government, and the bureaucrats making a big show of digitisation as a sure-shot achievement of the otherwise dubious decision. Reels of statistics are being dished out to show the expansion of the digital payment universe as the most tangible result of demonetisation, thus choking the channels used by black money to regularise ill-gotten wealth.
To back the claim, the government asserts that the value of digital payments has shot up from Rs 6,952 crore in 2016 to Rs 12 lakh crore in October 2022. But the sad fact is that the increase in digital payments has done pretty little to fight the flow of black money into the economy, particularly real estate and construction, which has been the most favoured conduit for unaccounted money. According to the results of a survey, the prevalence of black money in real estate transactions remains even after six years of demonetisation. The survey further revealed that 8 percent of the respondents had paid more than half the total amount in cash. While 15 percent had paid 30-50 percent of the value of the property/land in cash, another 10 percent of the respondents paid 10-30 percent in cash. Thirty-five percent of the people did not divulge the details of their real estate transactions. Even in daily life, things such as paying domestic help, house repairs, and other expenses were largely dealt with in cash, without receipts.
The prevalence of cash usage in the country had gone down, first due to demonetisation and later due to the pandemic, where people were restricted to ordering and paying for things online. Yet, with the rampant use of cash without receipts and black money, the jury is still out on the success of demonetisation, other controversial claims notwithstanding. Despite a surge in digital transactions cash in circulation was up 9.2 percent in the economy as of March 18, 2022, to hit an all-time high of Rs 31 lakh crore compared with Rs 28.5 lakh crore in the year-ago period. Cash with the public increased by 68 percent since November 2016 when the government announced demonetisation. Cash withdrawals at ATMs have also gone up from Rs 2,51,075 crore in March 2020 to Rs 2,62,539 crore as of March 2022, according to data from the RBI. This is partly attributed to increased cash withdrawals on ATMs, especially in rural India, due to the disbursement of various beneficiary schemes through Jan Dhan accounts and the withdrawal of Covid restrictions. But the real benefits of demonetization are yet to be seen at a mass level, who are still hoping for the ‘Acche Din’!
