Cashless doesn't promise corruption-free economy: Professor Sunil Mani
THIRUVANANTHAPURAM: Centre for Development Studies director professor Sunil Mani said that a cashless economy was no guarantee for a corruption–less economy. Norway, which is the most cashless economy in the world with a ‘cash to GDP ratio’ of 1.45 percent, has one of the highest unaccounted income to GDP ratio. “On the other hand Japan, the most cash-based country in the world, has the lowest share of unaccounted income,” Prof Mani said while speaking at a panel discussion on ‘Changing Faces of Direct Taxation in India’ at the Income Tax Office here on Monday.
Prof Mani said that the rate of growth of cashless transaction was back to pre-demonetisation levels. “In the two months between November 17 and January 17 there was a big jump in cashless transactions,” the CDS director said. “Once the economy was re-monetised, cashless transactions plummeted to virtually zero. So much for the claim that we are moving towards a cashless economy,” he added. Prof Mani also outlined four major reasons why a shift to cashless transactions was a far cry for a country like India. “The primary requirement for a cashless economy is a bank account. One out of two people in the country has no bank account,” he said.
The Jan Dhan project did take banking deeper but the average Jan Dhan account is Rs 3000. The second hurdle to the shift is the low diffusion of broadband in the country. “Our internet speed is one of the lowest in the world,” Prof Mani said. Thirdly, low digital literacy. Lastly, the shortage of ‘cashless transaction’ infrastructure like ‘points of sale’ machines. “Fact is, these machines are not made in India. They have to be imported from China,” Prof Mani said. Former income tax official and a member of Kerala Public Expenditure Review Committee R Mohan said that the GST would usher in information-based era for direct tax personnel. “Henceforth, it will not be the tax official but others in the supply chain who will force others to comply,” Mohan said.
