Bengaluru: A month after the country saw perhaps the boldest move in years, demonetisation is still a debatable decision to many. As far as the tourism sector in the state is concerned, it has been far from a joyride, says Tourism Minister Priyank Kharge.
While travel package bookings is at an all-time low, even after 30 days of adjustments, the situation still appears stagnant. “Tourism has taken a big hit, especially in terms of KSTDC bookings. We’ve seen a fall of 32% and it is pretty bad. While I think the intentions behind the decision may have been good, but the central government had not thought it through properly,” Mr Kharge said.
The decision that started off as a way to uproot black money in the country quickly changed into a way to counter counterfeit currency and now seems to have morphed into a drive towards cashless economy which is why it appears that the government is actually clueless about its execution, he said.
“They want to go digital entirely and it’s a great thought, but 87% of the population doesn’t have smartphones and e-wallets and mobile banking! They do not seem to have a plan in place,” he said. KSRTC has also been on a bumpy ride. While the losses run high, demonetisation is changing the face of tourism, said Mr Rajendra Kataria, Managing Director, KSRTC. “We have suffered a loss of about '13 crore in just a month. The travel routes have gone down by about 20%, because people aren't traveling for leisure anymore. At a loss of about '70 lakh every day, this month has been hard.”
Buses are almost empty and the cash crunch is taking a toll on local tour operators. “We don’t have cash to complete transactions with our customers. 80% of our vehicles are empty, bookings are practically nil. Business is down by about Rs 3 lakh every day!,” said Mr Ansar, manager of city-based KPN Travels.
Credibility of rupee has been hit: Expert
"Cashless has a whole new meaning. The only place that has worked, are the ATMs,” quipped Professor Narendra Pani of National Institute of Advanced Sciences.
In his lecture ‘Slapping a giant: The demonetisation gamble’ at the Indian Institute of Science on Friday, he said, “In the debate over demonetisation, how the credibility of the Indian rupee has been affected has not been discussed. In any country, the credibility of currency is built only when it is in hand.”
He said that keeping a weekly limit on how much a person can withdraw, is a completely totalitarian move by Prime Minister Narendra Modi, which we have received quite patiently. The faith that state banks can always be relied on has also been tarnished, he added.
So far Rs 11.55 lakh crore has come back to the banks as deposits and if the rest of the Rs 4.2 lakh also comes back, it either means there is no black money at all, or people have found ways to convert it to white. According to him, the Jan Dhan accounts, which are meant for farmers, is one of the routes black money hoarders have used to launder their cash. Transitioning to gold, donating to temples is the other method, he added.
As for feasibility of the move to go cashless, he said, “With 1/4th of the country’s population illiterate, one cannot expect them to go cashless. There are two things that can happen post-demonetisation. One set of the population goes cashless digitally and the other goes back to the barter system, which is also cashless. he added.
