My five-year-old daughter has been asking me to get her a toy scooter for a long time. I wanted to buy one and give it to her as a New Year gift. I and my wife, along with our two children, visited a bicycle shop to buy the toy. The shopkeeper showed us a variety of toy scooters. My daughter liked a pink colored one, which is made in China. Since I have profound doubts about the durability of Chinese products, I asked for a non-Chinese brand. However, the shopkeeper said that all the toy scooters in his shop are made in China. He quoted a price of Rs.1450. On the face of it, the product looked good but I was still in a quandary whether to buy it or not. The product does not have any MRP mentioned on it and I was apprehensive that I may end up paying more than it’s worth. However, I finally decided to go for it after the shopkeeper agreed to reduce the price to Rs.1000.
By the time I got the toy assembled and reached the billing counter the shopkeeper had already made a bill for one thousand rupees and handed it over to me. The shopkeeper said “Cash Dedona Bhaiyya” when I presented my debit card for payment. After I expressed my inability to pay in cash, he reluctantly swiped my debit card. And thereafter he took away the bill that he had given previously and prepared another one. I realized that the bill that was given to me previously was fake, and now I got the original one. Then I understood that the shopkeeper, since he accepted the payment through digital means, can’t escape the payment of tax and therefore is forced to give the genuine bill. Though I have been reading a lot about the benefits of cashless society, I never got an opportunity to experience its positive impact on the society and economy. For the first time in my life, it so happened that a shopkeeper feared to give a fake bill. As I was exiting the shop I derived the satisfaction of being part of a clean transaction.
I learned two very important things from my New Year’s Eve shopping. The first thing is, India continues to be a nation of shopkeepers with hardly any manufacturing base, and as a result, the Chinese products continue to flood Indian markets. Chinese products, which are cheaper and don’t have MRP mentioned on them, serve two purposes – they are attractive for the profiteering Indian shopkeepers and also beneficial for price sensitive Indian consumers. One of the New Year resolutions the Modi-led union government must make is to give a renewed push to the “Make in India” campaign to build a strong manufacturing base in the country.
The second thing I learned is the demonetization is proving to be very beneficial to the economy. The wealthy and the elite, through their proxies in the media and the political class, have tried to demonize it and will continue their efforts with utmost vigor to scuttle it just because the measure is proving to be a huge stumbling block in their efforts to accumulate black money. Indian society, in spite of being too religious, is inherently corrupt and the people are ever ready to exploit each and every loophole in the system to amass unaccounted wealth. The demonetization and the resultant cashless society empower the government to track each and every high-value transaction and thereby enable the government to widen the tax net. Transparency in the economy will force the unscrupulous elements to fall in line, which will invariably lead to cleaner and more productive economy. Any bubble economy which stands on gems, jewelry, illegitimate cash and real estate is bound to burst one day.