Demonetisation: Prime Minister Modi Exhorts Rural Masses to Take To Digital Wallets

Speaking at an election rally in UP yesterday, Prime Minister Modi again requested people to support his demonetisation move and remain patient for a few more weeks. He asserted that the demonetisation move shall provide long term comfort to the masses in the form of eradicating the parallel black economy and thus lead to more jobs creation and in eradication of poverty. In return, what people are suffering is a short term pain that shall also ease out in the coming weeks.

However, the biggest thrust for Digital India came in the form of his appeal to use digital wallets by the rural population. The right panacea for the future of Indian economy yes but how does the road leading up to it looks like?

Imagine a villager with a smartphone (not far-fetched as volumes on Facebook and WhatsApp suggest) trying to conduct a financial transaction through a digital wallet. Unlikely, right? Well, not really. The comfort level with using such gadgets is very much there as the number of viral videos on social media suggest. What blocks the same person from taking to digital platforms are the following:

1. The fear of the unknown aka security threats.

2. Costs incurred

For a start, the current cash crisis and convenience digital wallets bring might tempt a person to make an attempt, and this is where the PM has struck the right note, in the longer run though it is going to be pure economics that’s going to rule the roost. If transferring Rs 50,000 from a digital wallet is going to cost you Rs 500 (@1%) as transaction charges while transferring money to your bank account, people might not hold on to it. A point to ponder for the honourable PM and perhaps something of a unified payments gateway might hold more ground in the longer run than just this piecemeal approach!