A citizen's view on India's "war on cash"

So far I have been a silent spectator of ongoings, but since @Wendell and Ryan have mentioned this topic at least a couple of times on the Level1..uhm, "News" (Come on, call it "Off the rails" already), I felt I should chime in and provide some of my views on the matter.

I put the title within quotes for a reason, I do not believe that India is willing, or even capable of moving away from cash, anytime soon.

Let's talk about infrastructure. How much of the Indian population has access to reliable, fast internet? Not a lot. So there goes Internet banking, not to mention the fact that the entire debit card system, "Rupay" is quite crippled. I needed to get a credit card just so that I could purchase games on Steam, and that too required jumping through hoops.
Most small to middle scale stores don't even accept cards. VISA, Mastercard, doesn't matter. They don't even have a machine.

So, what exactly happened at the ground level when Rs 500 & 1000 currency denominations were scrapped?

Chaos, confusion and shortage. The result, long queues outside ATMs. Most of them were shut down and only a few government banks kept their machines operational. Rs 100, the largest bill that remained in use, is a really small currency denomination (<2 USD) so as you can imagine, there was an acute shortage of bills in several places, that too, at a time when everybody needed to withdraw cash, as their older bills were useless and had to be deposited at a bank. (I'm not even going to talk about the queues in banks)

I, personally, live at a state capital with hundreds of ATMs and still had to travel more than 5 kms once to get cash; and would have had to travel further if I wanted to use my card for shopping. I don't plan on driving several kilometers to a supermarket every time I need to get some groceries. Still, it wasn't a big deal for me here, but an inconvenience none the less, and I can only imagine what the situation would be like in sub-urban and rural areas.

Also, this is not a major change in terms of currency form, since larger denominations of cash aren't going away. New Rs 2000 and 500 bills are being introduced as a replacement. So the entire episode seems more like a gimmick to me, than anything else. Creates a lot of noise but has little real impact in terms of currency. Sure, it may deter some black money hoarders, but I doubt if much is really going to change; and let's not forget, most of the black money of this country is locked up in foreign (Swiss) banks. I doubt if any real big league crooks are going out of business.

How do I view it?

Just another annoying hoop to jump through, with little foresight or benefit to justify the inconvenience.

P.S : It should go without saying that I am not an economist or expert on these matters. What I have mentioned above is just an account of my experience with a few thoughts and facts added in there.

A modern country should move away from cash. India does not seem to be ready for this.

@Leo - Are you an Indian citizen?

Yes, uhm, isn't it obvious from "citizen's view". ;)

Thanks - it was interesting reading your post. Thanks for sharing.

I disagree, and judging by the way things are going, I'll probably continue to disagree in the next 5-10 years, no matter what country it is.

I think a modern country should always provide choice, until there is certainty that it can leave behind the old ways without serious consequences. If a government actually decides to include a "Monetary system & Finance" (NOT economy) curriculum at least 4 years long for high schools, then maybe, a decade later, we can start talking about advances in currency systems. I don't even want to mention cyber-security. Younger generations are a bit more tech-savvy, but we all know how ill informed most people are regarding these things. They should at least have a choice.

Don't get me wrong, cashless is the future, we're just not ready yet.

Who's we? The US might not be ready, India definitely not, probably neither China.
Scandinavia, Belgium, Netherlands, Germany is a different story.

it's face it it's good leveraging tool to have a cashless society. More overhead to do w/e when banks statements are just digital. Inflation and money scarcity isn't controlled by what we call "currency" hoarders.

Just look at our society it's benefiting from ATM purchases, business loans and payments are almost all digital and just some electronic balance somewhere. Only old people above 60 years old hunk around hundreds in their wallet. Reduces just the 90s era punk holdup. Rarely do you see 1,000 or 10,000 dollar bills anymore. If they don't wanna deal with low end currency it's fine. America shoulda done away with the penny and nickel as well. Just have quarters and dimes.

Heck I'd rather have a higher inflationary values for money like Laos and Japan it helps the people have money "smarts", dealing in values of 100 to 10,000s instead of cents and dollars which IMO are ripping the money out of people in America in general. Like Wal-Mart's 5.98 deals which basically is 6 bucks. Or how good bargains are anywhere from 20-50% off retail value and the majority of people won't even try to get better value for their money.

Take for instance 60w bulbs at Walmart, the other day saw this older poor senior citizen pickup 5 single bulbs for $1.58. Which was right next to the 6 bulbs for 5.98 packet... He just got ripped off 2 dollars!! Or paid 25% more for same products!!! If this was in japanese yen. If this was posted in Yen instead of approximately 700 vs. 900 yen that's a huge difference and easier to spot.

There's a lot of countries that we can consider "modern" but not ready for a cashless system.

USA is certainly modern and you are right to say they are not ready. But don't think Scandi, Belgium, Netherlands and Germany are any safer for the cashless transition. I suspect they have most of the same weaknesses as USA but just haven't been as targeted as USA by hackers. They certainly lead by a great example, hell Estonia is now more awesome than ever, they even have e-citizenship.

But no, none of them, none of us are ready to go full-cashless yet. That's, of course, just my opinion. That doesn't mean we're not getting there, it just means that it would not be prudent yet to transition just to prove that it is possible, or just to prove how "modern" your country is. Too much is at risk.