As Delhi Air Quality Plunged, 30 Alerts That Were Never Issued

November 9, 2017

An emergency air-quality warning system created in 2016 for the national capital territory of Delhi has failed its sole purpose: To warn citizens of hazardous levels of air pollution.

Vehicles ply in reduced visibility in south Delhi as smog enveloped the city with a spike in particulate pollution. Over the last one month, residents of the national capital territory of Delhi should have received an alert every day, warning them that air quality readings were breaching acceptable levels.

Over eight days to October 16, 2017, as Delhi’s air quality worsened, reaching 10-12 times above safe limits set by the World Health Organization (WHO), the government ignored its own plan, which also included a clean-up of the air. Officials should have, among other things, enforced pollution controls on thermal power plants, sprinkled water on roads to curb dust and curbed traffic jams.

Over the last one month, Delhi residents should have received an alert every day, warning them that air quality index (AQI) readings were breaching danger levels. Since October 8, 2017, air-quality levels crossed “poor” eight times, “very poor to severe” 21 times and “emergency” once, as they have for 48 hours to November 8, 2017, according to data from the government’s own alert system, the Graded Response Action Plan (GRAP).

“The Government had enough time to implement GRAP and systematically issue health advisories as per the action plan guidelines,” said independent researcher Aishwarya Madineni, who analysed the Central Pollution Control Board’s AQI readings. “However, the effort to create public awareness and alert the citizens to safeguard their health only happened after reaching an emergency situation.”

A plan ready to be implemented–except it was not

After Delhi witnessed its worst smog in 17 years in 2016, the CPCB, under directions from the Supreme Court, submitted the GRAP to address the air-pollution crisis gripping the national capital region, particularly in winter.

While the ministry of environment, forests and climate change cleared the GRAP on January 12, 2017, the plan received approval from the nodal Environment Pollution Control Authority on October 18, 2017–10 months later.

Based on national air-quality index (AQI) readings generated by CPCB air-quality monitors, the GRAP system categorises pollution levels as “good” (AQI reading of 0-50), “satisfactory” (50-100), “moderate” (100-200), “poor” (200-300), “very poor” (300-400), and “severe” (400-500). Each grade of pollution involves curbs to prevent escalation. This is how it is supposed to work:

An AQI reading of over 500 is considered to an “emergency” and involves a shutdown of most outdoor activities. These measures are not new to authorities–they were recommended by a Indian Institute of Kanpur (IIT)-Kanpur report submitted to the Delhi government in January 2016, as IndiaSpend reported on November 10, 2016.

What the government should have done but did not

Air quality in Delhi began to dip from “moderate” to “poor” in the first week of October 2017 and proceeded to worsen.

Apart from curbing traffic, enforcing pollution standards on power plants and sprinkling water to curb dust, the government also should have made citizens aware of pollution levels using social media and mobile apps.

With the start of Diwali, air quality considerably worsened. From October 17 to November 6, 2017, the region recorded “very poor” air quality, 12-15 times above WHO limits, as we said.

On Diwali day, October 20, 2017, CPCB monitors in the national capital region recorded “severe” levels of pollution with an AQI reading of 403–16 times above WHO limits, suggesting poor implementation of the SC ban on firecrackers.

Source: Central Pollution Control Board

Over the last three weeks, government authorities, as per their own plan, should have also issued health advisory alerts for vulnerable populations or young children and senior citizens, banned use of diesel-run generators, raised parking fees, increased public transport services, and banned the use of firewood and coal.

Why GRAP cannot work unless various agencies work together

To be successful, most components of the GRAP require concerted and coordinated efforts from various agencies and bodies spread across the national capital region (NCR) and neighbouring states.

“GRAP has an ambitious set of measures under each category of alerts to be issued with action extending to Haryana, Punjab and Uttar Pradesh,” said Madineni. “Yet, the system does not mention a proper mitigation plan for addressing crop fires across the NCR states, to which the evidence clearly attributes a 25% rise in the pollution levels. The fireworks ban for Diwali was also a complete eyewash with little or no implementation bringing us to the emergency situation we are in today.”

(Saldanha is an assistant editor with IndiaSpend. Data inputs by Aishwarya Patil, an intern with IndiaSpend.)

The BJP’s Assault Has Been on the People, Not Corruption

November 9, 2017

A reality-check exposes the hollowness of the BJP government’s tall claims on fighting corruption.

The BJP’s Assault Has Been on the People, Not CorruptionSu

Newsclick Image by Nitesh Kumar

The currency ban announced by Prime Minister Narendra Modi was trumpeted as a major step aimed at unearthing black money and which would thus deliver a serious blow to corruption in India. The vacuity of this claim has been conclusively demonstrated by now, but the BJP never tires of insisting that they have been fighting corruption.

A reality-check of a few of the measures taken by the government would bring the tall claims of BJP spokespersons crashing down to earth.

Money laundering made easier?
Union Minister Ravi Shankar Prasad, for instance, has claimed in an article published on Tuesday that demonetisation was “a bold assault on corruption”. One of the examples of the government’s “boldness” that he mentions are the amendments to The Prevention of Money Laundering Act 2002 which have been supposedly brought in to make the law more stringent to deal with the menace of black money.

But he conveniently omits to mention the fact that the government has rolled back its earlier order which made it mandatory for gems and jewellery deals to report all sales above Rs. 50,000 to the financial intelligence unit.

As per the notification issued on 23 August 2017, dealers in precious metals, precious stones and other high-value goods having a turnover of over Rs 2 crore in a financial year had been “notified as persons carrying on designated business and professions under the Prevention of Money Laundering Act (PMLA), 2002”. This had made such dealers reporting entities under the Act, requiring them to intimate the relevant authorities about transactions above certain limits.

But the government issued another notification on 6 October, withdrawing the earlier one dated 23 August. A separate notification was supposed to be issued after considering the points raised in the representations received from various Associations in the Gems and Jewellery sector.

According to reports , the Rs. 50,000 limit for reporting had “dampened sentiments”, and the withdrawal of the limit apparently lifted the spirits of the jewellers. It has been one month since the order has been rescinded, but no new notification has been issued. This raises some obvious questions. Is the order only aimed at lifting the “spirits” of the jewellers who carry on legitimate business, for instance, or is it also intended to help lift the “spirits” of those with unaccounted money and who intend to park it in gold and jewellery? Given the fact that some of the major centres of the gems and jewellery business are in Gujarat, was the withdrawal of the restrictions aimed at appeasing some important players, or at greasing certain money channels ahead of the Gujarat elections? These remain unanswered questions.

The unending wait for Lokpal
Yet another example of broken promises by the BJP with regard to fighting corruption is the case of the Lokpal bill. The BJP came into power promising the appointment of the Lokpal (anti-corruption ombudsman). Well over three years have passed since Modi became Prime Minister, but the government has not even implemented the law enacted by the parliament to establish the Lokpal.

The government has refused to appoint a Lokpal, claiming that the Act says the Leader of the Opposition has to be a member of the selection committee. The government argues that currently there is no LOP in the Lok Sabha, as no opposition party has the numbers (by convention, a minimum of 10% of Lok Sabha seats) required for its leader to be called the LOP.

Senior advocate Prashant Bhushan, however, argues that there are several laws which either define the LOP as the leader of the party in opposition to the government having the greatest numerical strength, or which states that if there is no LOP, then the leader of the opposition party with the highest number of seats will be considered so.

The government meanwhile keeps insisting that an amendment which will remove this difficulty is on its way, but three years don’t seem to be enough for the BJP to bring about this amendment.

Electoral bonds to smoothen and whitewash corporate funding to political parties
The electoral bond scheme introduced by the BJP government in the Union Budget 2017-18 goes even further – it constitutes a grave threat to democracy itself.

The scheme allows those who want to donate to political parties to purchase bonds from authorised banks, against cheques or digital payments. The donor may then gift the bond to a registered political party, and the party can convert the bonds to money through its bank account.

As per this scheme, the identity of the donor will not be revealed. Rather than ensuring transparency in political funding, the Modi government has created a mechanism to allow political parties to receive funding from the rich and the corporates, without having to let the public know the source of the funding. Corporates can fund the political parties which promise to frame policies which will benefit them, while the parties can claim that their policies are framed keeping in mind the welfare of the people rather than their rich donors. The common people will have no means to know the veracity of such claims.

The Election Commission itself had stated that the government’s move to introduce electoral bonds is a “retrograde” step which would compromise transparency in political funding.

“Bahut hua bhrashtachar, Abki baar Modi Sarkar” (Enough with corruption. This time, Modi government.) was one of the slogans of the BJP in the run-up to the 2014 Lok Sabha elections. But one year after the disastrous demonetisation experiment which led to the death of more than 100 people, crippled agriculture and the informal economy, threw more than a million people out of their jobs, and accentuated the economic slowdown which was already underway, the BJP’s claims about fighting corruption come across as completely hollow.

All evidence shows that the assault of the BJP government was not on corruption. If anything, the assault has been on the economy and the working people.

Courtesy: Newsclick.in

Children out of school, people out of work: A year after demonetisation, Varanasi weavers still on their knees

November 9, 2017

As one enters the famous and dense colonies of Varanasi where weavers or ‘Bunkars’ of the city live and work, the familiar sound of handlooms and power looms seems absent; at least a lot less than what it was before November 8, 2016.

On that day, Prime Minister Narendra Modi announced that from midnight onwards, notes of Rs 500 and Rs 1,000 would be withdrawn from circulation. But the decision – which was taken on a pretext to curb the black money hidden outside the banks – did little to end the menace of black money, but did sound the death knell for the weavers of Varanasi.

Varanasi is the centre of weaving industry and known across the world for the finest Benarasi sarees. But the beauty of the saree compares in stark contrast to the condition of the weavers, a number of whom have started moving on to other jobs. Their children, once in school, are also now turning to weaving to ensure that the industry remains afloat.

Take the example of Wakeel Akhtar, a 50-year-old weaver who had grown his business of weaving enough to progress to power looms from handlooms. But for the past one year, only one of his eight power looms are running. The rest remain idle and gather dust.
All thanks to demonetisation, which was followed by GST.

Akhtar said, “During demonetisation, we started taking loans from several people. And that loan kept us running for several weeks. Otherwise, we were spending too much of our time standing in bank queues, rather than working on our looms.”

Soon after demonetisation, Varanasi’s weavers lost their daily earning. As a sector which survives on daily payment basis, the weaving community of Banaras was able to reach some sort of settlement only four months after the currency ban.

“For the bigger businessmen and firms, we were the tools to return the old currency in the banks,” said Akhtar, referring to the fact that small-scale workers, craftsmen and weavers were getting paid in older currencies, and they had to stand outside banks to exchange them.

But there are much bigger problems before the weavers, like the kids who have left schools and started learning to weave. 42-year-old Mohammad Azam is the father of three children. All were studying in the school until April 2017. After the academic session concluded, Azam was unable to register them again for the next session.

Azam explains the situation, “There are two kinds of weavers. The first is the loom owners. We have to take care of everything, from threads to the looms. And second are contractual weavers, who come here and work without any sort of responsibility for things, and they have to get paid a definite amount every day, irrespective of the conditions.”

“Both sections have taken a hit, but the second category has moved to other jobs. We, the loom owners, have no such option,” said Azam. “So I did not have any money to let my kids continue the studies. Now all have indulged in weaving because there is no any way out of this,” he added.

Sabir Ali, 30, was only a weaver before, but now he deals in other kinds of stuff related to weaving, like making threads. For him too, this was the only option. Ali said, “Luckily, I still weave, but fewer than before. But many of my friends went to Surat or Mumbai, in order to earn better in other jobs, as weaving is a dying business in Varanasi.”

Ali said, “Soon after problems of demonetisation ended, it was the cashless India thing which took a toll. Businessmen started to pay us in the cheques – as the government introduced a rule of not paying more than Rs 10,000 in cash.”

“We were people who lived on the daily wages. We used to spend our every day’s earning into the food and clothes. Now with the cheques, we have to wait three days for the amount to appear in our bank accounts, “said Ali. “So to feed, we have to have something else, so I am also selling low-quality threads to weavers.”

Sabir Ali took us into a house of his friend. There were four people sitting in the loom and finishing Banarasi Saree and cotton Saree jobs that came to them after four weeks of idleness. Aslam Ansari said from behind of one of the loom, “And we will get our payment more than a week after we submit our work.”
But the more surprising scene was in the adjacent room, to show which Sabir Ali took us into the particular house. There were two boys named Mohammad Alam (13) and Shamim Akhtar (14) who were weaving together on a loom. Shamim Akhtar still goes to school, while Alam quit recently. They both were learning to weave. Sabir Ali said, “They are not studying not because they are poor, but because their father cannot earn much on his own.” The kids nodded to this claim.

It is not a new thing to see kids learning the weaving process, but seeing them leaving studies because of weaving is indeed new.

The weavers, who were slowly recovering from the demonetisation disaster, were hit again in 2017 when the government introduced GST as “one nation, one tax”.

Rajeev Kumar Modi, a 45-year-old thread dealer in Varanasi, is also suffering the pain of demonetisation and GST. Modi said, “Soon government banned the currency, my warehouse left filled with the raw materials and threads for several months. No weaver was able to buy from us, so we were not able to bring more.”

“Soon the conditions normalised over a period of time, but after GST, weavers do not come here often,” said Modi.

He also said, “Previously we used to sell 20 or 30 kilograms of threads every day, now this has become our weekly count.”

Cotton and silk threads fell under 5 percent slab, while the artificial silk threads – which constitutes the major part of the business in Varanasi’s weaving community – fell under the 18% GST slab. Earlier, the Central Board of Excise and Customs refused to consider saree as readymade or made-up. And even if it was considered made-up, a mere 2% tax was levied on Sarees. But after GST, the prices of the final product as a saree went up by around 20%, but weavers’ wages were cut down.

“A businessman has to sell a saree to various customers with a profitable margin, so he cut down our wages. If we were getting thousand rupees for completing a saree before GST, now we are getting only Rs 700-800 for the same piece,” tells Shamim Ansari, a 32-year-old weaver from the city. “Our wages fell down because the profit margins had to be maintained,” he added.

In addition to the GST on threads, GST of 5 percent was also introduced on the Sarees, which faced heat from the various confederation of Saree dealers. And seemingly, government’s apathy towards the protest has hit the PM’s own constituency most.

One can argue that the issues of weavers have come to the notice of the government and that they are working to address these issues. Prime Minister Narendra Modi inaugurated a Trade Facilitation and Craft Museum Centre in Varanasi in September this year. The goal to establish the centre was to promote the work of weavers and artisans of the city. However, many weavers have not even heard of the centre, and those who know little about it say – if Mohammad Saqib to be quoted – that the centre is a museum and showcase of weavers’ work. “One should see the conditions from the ground that we are not able to build up any kind of product in our traditional workshops and looms,” added Saqib.

Moreover, the central government erected a Weaver’s colony and training centre in a Karsara village nearby of Varanasi in 1993-94. But the training centre lies unused because of its distance from the city’s centre which is more than 15 kilometres. So, while the government seems to have taken steps, their effect is limited and does little to assuage the pain of the weavers. And this is visible in areas around Bajardiha or Peelikothi – the two major centres of weavers in Varanasi – many weaving houses can be seen locked, even in peak times. Mohammad Jamaal, a 77-year-old resident of the community said, “This was the season of weaving. No one could sleep due to high demands ahead of wedding season. You could see weavers working at least 16 hours a day. Now you can see most people shutting their shops.”

Courtesy: Two Circles

Can the working class shape politics?

November 8, 2017

Excerpts from a lecture by Dr. Vivek Monteiro

Karl Marx and Frederick Engels answer this question emphatically in the affirmative in the Manifesto of the Communist Party, published in 1848.

In the ‘Manifesto’, they make a number of assertions- about inevitable crisis in capitalism, that capitalism produces its own gravedigger- the working class, that the working class needs its own party – a communist party, and that as a first step , the working class must win the battle for democracy.

The working class attempting to shape politics preceded Marx and Engels. In the 1830’s, the working people of England, Scotland and Wales were mobilizing en masse in what is called today the Chartist movement, to make democratic political demands. In 1838 they published the People’s Charter, setting out the main aims of the movement. Working men should be able to vote in parliamentary elections , voting should be by secret ballot, workers should be eligible to stand for election , property qualifications should be abolished and MPs should be paid a salary.

The massive marches in support of these democratic demands were sought to be suppressed and dispersed, resulting in fierce clashes, arrests and jail terms for the leaders. One of the slogans of the chartists, emblazoned on a banner of the Boiler makers, came from the pen of the Roman writer Terence, a former slave himself, written two thousand years earlier- “Humani Nihil Alienum”.Marx, when asked his favorite maxim, also wrote the same words- Humani Nihil Alienum. “Nothing human is alien to me.”

So we see that Marx and Engels were not the first assert a role for the working class in democratic politics. This, the working class in Britain did for itself. But three years before the ‘Communist Manifesto’, in 1845, Marx and Engels were the first to make an assertion of a different kind.

This was a statement about the scope of science and the scientific method.

SCIENCE

What do we mean by science?

D.D. Kosambi gives an answer which is as profound as it is brief: “Science is the cognition of necessity”

In the 5^th century BC, the Greek materialist philosopher Democritus, with incredible foresight, writes: “Everything existing in the universe is the fruit of chance and necessity”.

In his doctoral thesis of 1841, Marx chose to compare the philosophy of Democritus with that of his follower Epicurus. For young Marx, the problem was of finding a space for human activism. If everything is determined by chance and necessity, then where is the space for human freedom- for conscious human action? In this early writing, Marx, striving to keep a space open for activism, argues his preference for Epicurus, though in terms that are distant from his later Marxism. In 1841 Marx is not yet a Marxist.

The year 1845 is a milestone in the history of science. In this year Marx and Engels asserted that changing society is a valid subject for scientific investigation. The method for doing this they termed as “the materialist conception of history”.

Neither Marx nor Engels were born as Marxists. They arrived at what we today term ‘marxism’, through a process of activism, study and criticism of contemporary philosophical trends , culminating in their path-breaking formulation of ‘a materialist conception of history’ in two documents, the “Theses on Feuerbach”, and “The German Ideology” in 1845.

“We know only a single science, the science of history. One can look at history from two sides and divide it into the history of nature and the history of men.”

“The history of nature, called natural science, does not concern us here; but we will have to examine the history of men, since almost the whole ideology amounts either to a distorted conception of this history or to a complete abstraction from it.”

In the history of science the idea of a ‘materialist conception of history’ (the science of history referred to in the previous paragraph) does not begin with social science, but in the natural sciences. A conception of biology as a historical science begins well before Darwin (whose Origin of Species was published only in 1859). From the preceding century it was being recognized that two sciences- geology, and biology, could only be rationally understood as historical sciences. The fossil record, where geology met biology, were the pages of a history book, with a strong thread of causation linking the later pages of this book to the earlier ones.

By the early 19^th century, through the works of geologists like James Hutton and Charles Lyell, and biologists like Leclerc (Buffon) and Lamarck, it was being asserted that all of nature had a history, that this history could be understood, and that moreover, the human species, as a biological species, was a product of this natural history. The threads of necessity running through natural science in the form of a natural history were becoming evident. Biological science was taking shape as a program of cognizing this necessity.

Single mom loses job for showing middle finger at Donald Trump

November 8, 2017

A marketing officer in a building firm in US has had to lose her job after her photo of showing middle finger to Donald Trump went viral on social media platforms.

Juli Briskman was riding her bike when saw Trump’s cavalcade pass through her. She raised her finger at the US President, reported AFP. Briskman, a single mother, appeared to know exactly who was in the car.

“He was passing by and my blood just started to boil. I’m thinking, he’s at the damn golf course again,” the 50-year-old Democrat mother of two told HuffPost.

The obscene gesture was captured on 28 October by AFP White House photographer Brendan Smialowski, who was riding in Trump’s convoy, quickly went viral. And it has now cost the single mom her job.

The president had gone to his Trump National Golf Club on the banks of the Potomac River, about 25 miles (40 kilometers) northwest of the White House.

Briskman lives nearby and was out for a Saturday bike ride when the convoy of black SUVs drove past. After the first time the convoy passed her, she caught up again when it stopped at a red light.

The photo only showed Briskman from the back, unidentifiable, her left arm out and middle finger up. But when she realised it was her in the photo, Briskman proudly posted the image on her social media page. The image had gone viral by that time.

It isn’t known whether Trump saw the gesture. But it didn’t please Briskman’s bosses at Akima LLC, a builder that does work for the US government and military.

Three days later they told Briskman, a marketing officer, she had to go. “They said, ‘We’re separating from you,’” Briskman told HuffPost.

“Basically, you cannot have ‘lewd’ or ‘obscene’ things in your social media. So they were calling flipping him off ‘obscene.’”

The latest incident will raise plenty of eyebrows as far as freedom of expression in the US is concerned. Back in India too, critics of Prime Minister Narendra Modi have had to pay heavy price for mocking or criticising him. Last week, Tamil Nadu Police had arrested 19-year-old S Thirumurugan after he criticised Modi in a private Facebook conversation.

Courtesy: Janta Ka Reporter

BJP’s Communal Versus Progressive Discourse: Jignesh Mevani

November 8, 2017

Newsclick traveled with Dalit rights leader Jignesh Mevanito Lakhtar at Surendra Nagar in Saurashtra and talked to him at length.

Ahead of the crucial assembly elections in Gujarat, Dalit rights leader Jignesh Mevani is busy addressing people at different locations of the state to ensure the defeat of the BJP, which has been ruling the state for over two decades.

NewsClick travelled with him to Lakhtar at Surendra Nagar in Saurashtra and talk to him at length.

Courtesy: Newsclick.in

Muslim girl teaching Yoga in Ranchi provided security after threats

November 8, 2017

Ranchi, (IANS): Security has been provided to a Muslim girl in Jharkhand who teaches Yoga, as she is facing a threat to her life from members of her own community, the police said on Tuesday.

Representation Image

The matter was brought to the notice of Sanjay Kumar, Principal Secretary to state Chief Minister Raghubar Das. He asked the police to provide security to the girl.

Acting on the instructions, Ranchi Senior Superintendent of Police (SSP) Kuldeep Dwivedi sent a police team to meet her, and now she has been provided two security guards — one male and one female, according to the police.

Rafia Naaz, a resident of Doranda locality in Ranchi, ekes out a living for her family by teaching Yoga. She is the eldest among her siblings. She is also doing her M.Com from a local college.

She came into the limelight after she shared the stage with Yoga Guru Ramdev in the city some time back.

Her family members are scared of threats issued by the members of her own community. She was threatened with Fatwa if she continued with her Yoga teaching.

“My problem is with members of both communities. On one hand I am asked not to teach Yoga and on the other, I am asked to change my name so that people do not hesitate to learn Yoga from me” Rafia told reporters.

She said: “I will continue to do Yoga and teach Yoga till the end of my life.”

Courtesy: Two Circles

Currency In Circulation 91% Of Pre-Demonetisation Value; Digital Payments Up But Fluctuating

November 8, 2017

One year after the government annulled high-denomination currency notes and subsequently replaced them with new notes, the total currency in circulation remains 9% less in value terms. Digital payments have increased in number and value, but fluctuate month to month.

On November 8, 2016, Prime Minister Narendra Modi had announced a surprise withdrawal of Rs 500 and Rs 1,000 notes–which constituted 86% of cash in circulation at the time–a move he said would help weed out corruption, curb money laundering, and remove black money and counterfeit notes from the system.

Soon after announcing the move, the Prime Minister had proceeded on a trip to Japan, inviting much censure. By the time he had returned on November 12 to face widespread demands for an explanation, the government’s spin doctors had affixed the terms “demonetisation” and “notebandi” to the move, claiming a shifting array of motives, as IndiaSpend reported on December 5, 2016, after analysing the Prime Minister’s speeches (in translation).

A year on, currency notes totaling Rs 16.35 lakh crore in value are in circulation (as on October 27, 2017), comprising 91% of the Rs 17.97 lakh crore on November 4, 2016, before demonetisation, according to data released by the Reserve Bank of India (RBI) on November 3, 2017.

Digital payments increased in value to Rs 124.7 lakh crore in September 2017, up 33% from Rs 94 lakh crore in November 2016, but dipped by 20% by October 29, 2017 to Rs 99.3 lakh crore over the preceding month, RBI data on electronic payments system, updated on October 31, 2017, show. Month-wise data indicate similar fluctuations.

Currency in circulation

The high-denomination notes that were annulled amounted to Rs 15.44 lakh crore, about 99% (Rs. 15.28 lakh crore) of which had been returned to the central bank by June 30, 2017, according to the RBI’s annual report 2016-17, IndiaSpend reported on September 5, 2017.

The currency in circulation has steadily increased since January 2017.

Source: Reserve Bank of India

It cost the RBI Rs 7,965 crore to print new currency notes between July 2016 and June 2017, as against Rs 3,420 crore in 2015-16, an increase of 133%, IndiaSpend reported on September 5, 2017.

“The share of small currency notes was 54% in 2004, declined to 28% in 2009 and was 13% when demonetisation happened. It has now gone back to 28%, the 2009 level,” said Soumya Kanti Ghosh, group chief economic advisor, ‎State Bank of India. A larger share of small currency notes leads to less corruption and a cleaner economy, he said, adding that the RBI has consciously reduced the printing of currency notes to push digital payments.

Digital payments up, but monthly fluctuations evident

The number and value of digital payments has increased compared with the pre-demonetisation level, but by varying extents each month.

Although there is a 6% increase in the value of digital payments recorded in October 2017 (Rs 99.3 lakh crore) over November 2016 (Rs 94 lakh crore), there is much monthly variation.

Source: Reserve Bank of India/National Payments Corporation of India; Data updated as on October 31, 2017. Figures upto October 29, 2017.

Note: Data is provisional. Card transactions of four banks are covered; prepaid payment instruments issued by eight issuers for goods and services transactions only are included; mobile banking figures are from five banks; the total volume & value of electronic payment systems does not include mobile banking; figures from the national automated clearing house are for approved transactions only.

Digital payments increased in value by 11% in the month immediately after demonetisation–from Rs 94 lakh crore in November 2016 to Rs 104 lakh crore in December 2016. Yet, they declined by 7% in January 2017 and 11% in February 2017 over December 2016, surged 62% (Rs 149.5 lakh crore) in March 2017 over February 2017, and declined 27% in April 2017 over the preceding month.

In terms of number, digital transactions increased 29% to 863.9 million in October 2017, up from 671.5 million at the end of November 2016.

“Digital payments lead to clean economy as it tracks money transactions, eliminates tax evasion and other social costs of currency,” Ghosh said. The currency in circulation before demonetisation was 12% of the GDP, and is now below 10% of GDP, he said.

Source: Niti Aayog.

PPI value has more than doubled from Rs 1,320.7 crore in November 2016 to Rs 3,061.8 crore in October 2017. Payments using debit and credit cards at POS, for which data from four major banks are available, are up 35% from Rs 35,236 crore in November 2016 to Rs 47,530 crore in October 2017.

Post-demonetisation, about 57% of credit card holders said they were using credit cards more often than they did a year ago, according to a survey by TransUnion Cibil, a credit information firm, The Indian Express reported on November 1, 2017.

Payments using UPI have registered by far the greatest increase of 6,981% (70-fold) in value, from Rs 90.5 crore in November 2016 to Rs 6,409.9 crore in October 2017. Based on the UPI platform, the government launched the Bharat Interface for Money, commonly known as the BHIM App, in December 2016, a month after demonetisation. Transactions through this app have increased in volume almost 179-fold (17,767%), from 42,716 in December 2016 to 7,632,348 in October 2017.

The reasons for its success include the fact that BHIM can be used on any phone–and not just a smartphone–and does not require an internet connection, a limitation in vast parts of the country. The latest data from NPCI indicate a 120% increase in the use of UPI transactions in just one month from September 2017 (30.8 million transactions) to October 29, 2017 (67.8 million).

In a tweet NPCI cited an even higher figure for all of October 2017, 76.96 million.

The recent release of data led to an exchange of views on Twitter:

In value terms, however, UPI payments accounted for less than 1% (or 0.1%) of the total electronic payments (Rs 99.3 lakh crore) made in India for the month October 2017, even though in absolute numbers (67.8 million) it accounts for 7.8% of total electronic transactions (863.9 million).

By value, RTGS accounts for 80% of the total electronic payments made in October 2017, NEFT 12%, CTS 5.7%, IMPS 0.7% and NACH 0.8%.

“RTGS and NEFT are high-value transactions over the internet; corporates and banks are its big users. UPI is used more at the retail level, and transaction values are typically lower,” Madan Sabnavis, chief economist at CARE Ratings, told IndiaSpend.

Aadhaar-enabled payments–not added under digital payments in the above calculations–have more than doubled (169%) from 37.8 million transactions in November 2016 to 101.9 million in June 2017.

Meanwhile, payments through mobile banking, for which figures from five banks are available, have also fluctuated month to month, although they shrank in value by almost 15% to Rs 1,05,352 crore in October 2017, as against Rs 1,24,485 crore in November 2016.

Cashless economy a long way off

Despite the uptick in digital transactions since demonetisation, India reports the lowest digital payment transactions per capita per annum (11), as compared with similarly-placed economies such as China (26), Mexico (32), South Africa (70) and Brazil (142), according to NITI Aayog’s January 2017 report.

Source: NITI Aayog

With the rapid development of digital infrastructure, the number of internet users in the country will double from 300 million in 2015 to 650 million by 2020, according to a July 2016 report entitled Digital Payments 2020 by Google and the Boston Consulting Group. “Modified UPI will be a game changer… Digitisation of cash will accelerate over the next five years with non-cash transactions over-taking cash by 2023,” the report said.

However, economists differ in their prognosis. “Digital payments carry a cost and hence will be used in moderation until they [costs] come down,” Madan Sabnavis, chief economist at CARE Ratings, told IndiaSpend. The initial upsurge was due to absence of cash, which has been corrected. While the number and value of digital payments is now higher, only a section of the population has taken to it in a big way. “With cash returning to the system, there has been some reverse migration from digital to cash. We need to incentivize people and not charge them for going digital to really succeed,” he added.

A cashless economy requires digital infrastructure such as swipe machines, smartphones and an internet connection, as well as widespread financial education, which are lacking across vast parts of the country, as IndiaSpend’s stories one year after demonetisation have reported.

(Mallapur is an analyst with IndiaSpend.)

Courtesy: India Spend

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