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New Delhi: Cash transactions in the country have reduced by as much as 50 per cent, a survey by LocalCircles, a community social media platform, has found.

Published Friday, the survey collected over 45,000 responses across 300 districts in India. Of these, 51 per cent respondents were from tier 1 areas, 34 per cent from tier 2, and 15 per cent were from tier 3, 4 and rural districts. Around 69 per cent respondents were men while 31 per cent respondents were women.

The survey has concluded that although demonetisation in 2016 brought digital payments into mainstream, the Goods and Services Tax (GST) rolled out eight months later enabled it further, but it is the Covid-19 pandemic that has accelerated it.

To determine how much the use of cash had dropped, the survey asked the respondents the percentage of their monthly transactions made without cash receipts.

Around 14,738 citizens responded, of whom, 48 per cent respondents said that they conducted only 5-25 per cent of their monthly transactions without receipt, 34 per cent said they conducted 25-50 per cent of their monthly transactions without receipts and 14 per cent said they conducted 50-100 per cent of their transactions without receipts.

The data was then compared to the same survey that LocalCircles had conducted in 2019. It was found that 27 per cent of the respondents had made 50-100 per cent of their monthly purchases on average without a receipt in 2019. That number has dropped to 14 per cent in 2020.

The survey, with this finding, concluded that 2020 saw a 50 per cent reduction in the number of citizens who do the majority of their monthly purchases without receipt.

The findings are in line with RBI data published in October this year, which states that India in FY20 witnessed a massive rise in volumes of digital payments to Rs 3,434.56 crore.

In five years, from 2015-16 to 2019-20, digital payments saw an annual growth rate of 55.1 per cent in terms of transaction volumes and 15.2 per cent in terms of value. In October 2020, UPI-based payments hit a new milestone with 207 crore transactions.

Cash mainly for groceries, domestic staff

The survey also found that the majority of the cash was paid for groceries and domestic staff.

The survey included the question — “If you look at the last 12 months, for which category of purchase have you paid the most amount in cash (without a receipt)?”

To this, 15,376 respondents answered, of whom 39 per cent said it was for groceries and 31 per cent said for salaries of domestic staff.

Survey findings suggest that these two categories continue to remain the most common areas where transactions without receipts are made since these are mainly low-value transactions that people don’t ask for receipts or salary slips.

The survey also asked its respondents “the one move that the government should implement immediately to further reduce black money in India?”

Of the 15,492 responses, 38 per cent felt that mandatory disclosure of all assets of all ministries and government employees and their direct families would help in reduction of black money in the country. Around 33 per cent of respondents felt mandatory linking of property ownership with Aadhaar would be a move that will help arrest the circulation of black money in the country.

LocalCircles is a community social media platform that aims to enable citizens and small businesses to escalate issues for policy and enforcement interventions and enables the government to make policies that are citizen and small business centric.

Also read: ‘Landmark’ Rs 1 lakh cr monthly GST was first crossed in April 2018, but only 11 times since


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