Telangana Chief Minister K Chandrasekhar Rao is promoting all measures to make the state a cashless economy in due course.
Even as he is asking district collectors to promote awareness among people, especially in rural areas, there seems to be a huge infrastructure gap in the present system.
According to a Times of India report, Telangana needs 10 lakh point of sale (PoS) machines currently to go digital, but Telangana has only a mere 78,000 such machines available.
After the November 8 announcement by Prime Minister Narendra Modi that high value currency will no longer be valid in the country, the state has been facing a huge cash crisis.
In the wake of demonetisation, the Telangana government estimated a revenue loss of Rs 1,000 to Rs1,500 crore per month.
“We don’t know for how many months this (revenue loss) will continue. Till lower denomination currency notes come, there will be problems. It could be three months or six months. It totally depends on the central government,” Etela Rajender, state finance minister, told Livemint.
As the state government grapples with revenue loss, it has also failed to provide immediate solution to its people.
“Cashless transaction is not an immediate solution, it might help in the future but right now it is an impractical move,” Telakapalli Ravi, a Hyderabad base analyst, told The News Minute.
The rural areas have been hit the hardest by this move, he said.
“People need time to accept and get used to the method of online transactions and card payments. In the rural areas of the state like Siddipet and Ibrahimpet, few people have returned the PoS machines and asked for more supply of cash,” Ravi stated.
Businesses and small and medium scale industries too are bearing the brunt of demonetisation. “Though I support the cashless transaction move of the government, but for now it is affecting the small and medium scale industries,” said Ravindra Modi, president of Federation of Telangana and Andhra Pradesh Chambers of Commerce and Industry (FTAPCCI).
It was earlier reported that around 1.5 lakh small and medium industrial units including the city’s industrial belt had stopped production due to the cash crisis.
“Many of these industries are unable to pay salaries to their workers because very few labourers have access to banks or even bank accounts. More than 15% of the industries have been affected severely due to cash crisis and online transaction has not ease their business,” Modi said.
The industries might continue to suffer for a minimum of four more months, he added.
“The main challenge and question right now is what measures will the government take to ease the suffering of people due to cash crisis,” he said.
“People who have access to supermarkets, PayTm, debit and credit cards have not been hugely affected but people who don’t have access to these facilities are finding it difficult to even to meet their daily needs,” he said.
In the meanwhile, like always, this time around too both Telangana and Andhra Pradesh governments have been competing with each other in order to make the respective states a cashless economy.
First Post reported that one of the reasons behind this is that both the states are vying for central assistance for mega infrastructure development agenda.
However, several traders reportedly said that business has been down as they cannot give discounts to retailers because of online payments, as they have to pay Goods and Service Tax.