Three years after Narendra Modi in an address to the nation banned Rs 500 and Rs 1,000 currency notes digital transactions are increasing year over year but large number of people still prefer cash transactions over digital transactions as per a survey. The survey also pointed out that black money continues to dominate the real estate market despite the demonetisation of currency notes.
When asked how much cash did they pay while buying a property only 33% of the respondents said that they did not make any cash payment and paid the full amount by cheque or e-payment. All the remaining 66% of the respondents said that they used some amount of cash while buying a property in last one year. Two third of the real estate transactions saw a cash component of anywhere between 10% to 50%, as per a survey by LocalCircles, a community platform.
A majority of Indians continue to make a substantial percentage of their total annual purchases in cash, the survey said. About 40% people said anywhere between 5% to 25% of their total purchases were in cash, 29% said anywhere between 25% to 50% of their purchases were in cash and 27% said at they paid cash while purchasing almost every item in last year. This however is still an improvement over last one year, the survey said as more people did larger number of purchases in cash.
When asked how much cash did they pay while buying a property only 33% of the respondents said that they did not make any cash payment and paid the full amount by cheque or e-payment to the seller. All the remaining real estate transaction saw a cash component of anywhere between 10% to 50%.
“An important goal of demonetisation was to reduce the use of cash in transactions and encourage people to pay using non-cash modes, but the use of cash in the Indian economy does not seem to be reducing,” the survey pointed out.
Although almost 75% of the respondents felt there were some benefits of demonetisation. “People were asked that 3 years after demonetisation, what do they think was its top benefit. 21% said it reduced black money in the economy and 12% said it increased direct tax collections. 42% said it brought a large number of evaders in the tax net while 25% felt demonetisation had no benefits at all,” the survey said.
When asked about the negative impacts of demonetisation, 32% said it was loss of earnings for many unorganised sector workers and 2% said it was sizable migration of labour to villages and lower rural income. About 33% said the biggest negative impact of demonetisation is economic slowdown while 28% feel it had no negative impact. It has also been reported that the amount of fake currency seized in the last 3 years has considerable shot up when compared to the pre-demonetisation times, the survey said.