PANAJI
In November 2016, when demonetisation was announced and old Rs 500 and Rs 1,000 notes were withdrawn entirely from Indian economy, the trade was severely impacted in Goa.
The State government had then harped a lot on making Goa a cash-less economy. This had two objectives. One, to reduce the dependence on cash. Two, to ensure more businesses come within the ambit of tax by using non-cash means of making payments like swipe machines.
Around 10 months after the commencement of demonetisation last year, it appears that cash is back into the market, as trade of vegetables, fruits, meats, smaller items like stationary and services like courier is almost entirely in cash in Goa.
If we dig further, we would realise that this happened because none of the basic factors required to make Goa a cash-less economy changed in the last ten months. For example, debit/credit transactions still attract charges.
Vishal Lobo, owner of Digital World (retailer of mobile-phones), said, "Our margin is just 4% and there is 2% charge on credit card transactions and 1% charge on debit card transactions. Obviously, such charges eat into our low margins."
A number of financial experts say that the government has provided no incentives for cash-less transactions. Anup Prabhu Verlekar, a chartered financial planner (CFP), said, "If the government provides some incentives like tax rebate to businesses doing 100% cash-less transactions, then we will make some progress towards making Goa a cash-less economy."
Let alone providing no incentives for cash-less transactions, most government departments have not gone cash-less themselves, as they accept cash for all sorts of payments citizens are supposed to make.
At the same time, the much hyped service of National Payments Corporation of India, wherein people can dial *99# from their mobile-phones to get connected to their bank accounts is hardly in use in the market.
This service was available even for ordinary mobile-phones, which aren't smart-phones and therefore are not connected to the internet. The idea was to make small vendors use this service to make India a cash-less economy.
But, hardly any small vendor in Panaji municipal market was seen using this service to make or accept
payments.
A vegetable vendor said, "A lot of vegetable vendors in Panaji municipal market aren't educated. They don't understand services like *99#. One or two shops in the market accept payments through Paytm, but the large majority does not. For most of them, cash is the only way to do business."
Sources even said that a lot of traders fear that by using non-cash means like swipe machines all their transactions will come under tax scanner, which makes them uncomfortable.
Although, cash still reigns supreme in the market, the share of card transactions has gone up for certain product categories.
Ajay Patil, owner, Lisha's (seller of cosmetics), said, "70 to 80% of my business is on cards now and remaining in cash. Before demonetisation, it was 70 to 80% in cash and remaining through cards. The change has happened due to GST, wherein our billing system has been linked to GST system."
Under Goods-and-Services-Tax (GST) regime, businesses will have to file tax every month, which requires them to link their billing system (typically a swipe machine) to tax filing system. Due to this, number of card transactions, for certain product categories, has gone up.
But, even then, for most other product categories, necessities like vegetables and fruit, cash continues to the king of the market.
