Impact of Digital India and Cashless Systems in Rural India

IBM Corporate Service Corps (CSC) team started the Digital Literacy project with the NGO partner organization, Concept Society, which is a small and newly established NGO but has already made difference in the lives of many women and youth from the economically disadvantaged villages and communities. The project for the IBM team is to analyze the various user groups and prepare a training plan and strategy to teach the economically disadvantaged women and youth about the digital technologies in general and cashless payment methods in particular.

We started our assignment on the week of Feb. 27^th and visited the NGO’s office and talked to officials and volunteers on the day after the project kick-off. The corporate office is in Indore and there are two centers located in Dewas and Manpur towns (each about an hour’s drive from Indore) where majority of the employees work. We asked to meet multiple user groups so we can analyze the user characteristics from a representative population. We created four user groups – women and youth in Tribal villages, women and youth in farming villages, merchants in the temporary (weekly) farm market, permanent merchants/retailers in the Manpur town. We also decided to meet the city government and banking officials to understand what the government is doing to promote digital literacy.

The Tribal Village of Raikunda in Manpur Township Area

After driving on a well-maintained highway, we took a small road lined with tiny houses and huts, reaching the center of village shortly. We were greeted with enthusiasm and traditional welcome with drumming sounds, local flowers, and blessing sign on the forehead by a gathering of men, women, youth and children. After that, we were lead into a small community room where men sat on one side and women sat on the other, many of them covering their faces with a long scarf, “Ghungat.” It is a small village (population about 500) that has a primary school (up to 5^th grade) but the high school is in the nearby town, 3km away. General discussion showed that most of the people only had a basic education but were aware of the general politics and had high expectations from the current Prime Minister (PM), Mr. Modi. Most of the households had the bank accounts open under the “Jan Dhan” scheme but have had a zero balance ever since (2014). They were expecting a portion of the black money coming into their account as per the poll promise by the current PM in 2014 but it never came. People said they were highly inconvenienced about the demonetization but thought it was a good price paid to help get the country rid of black money. The adult men usually do the labor in nearby towns and villages whereas the women manage the households and farming for the family (average 0.20 acre land). The family income is about Rs. 4000-5000 ($60-70) per month with an average family size of 6. During the seven weeks’ period (Nov 8- Dec 31, 2016), finding labor work was very hard and getting paid even harder. Instead of bringing in about Rs. 1000 per week, they barely managed to get Rs 100 and just able to survive. We asked if they were aware about the Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA) 2005, which guarantees an employment of 100/150 days to every eligible adult (with job cards) in rural areas. The people seemed to know about the scheme but didn’t get paid anything in last three years due to the corruption in distribution (some admitted to getting Rs. 1000 but signing for Rs 5000).

A Vegetable Seller on the Weekly Haat Bazar Market

A typical worker works 5-6 days a week, makes about Rs 1000 and get paid weekly on Tuesday morning in cash. There is a local market (Haat Bazar) on Tuesdays where he/she goes after getting paid and spends most of the money buying daily essentials and clothing etc. for the family. They do not have any spare money to save in the bank. When asked about what the people would like the government to do to make the cashless transactions popular for them, ironically, they said they like the cash transactions better. They had their experience of receiving wages in checks during Nov-Dec and were very much inconvenienced by going to more than 3 km to a bank and stand in hours in the lines to deposit the checks and get the cash.

One good thing we noticed was that almost every household has a mobile phone but mainly carried by the men since they work outside homes. Half of the phone were smartphones, mainly carried by the youth. The youth were well aware of using WhatsApp but no one knew about other useful Apps or being able to connect to Internet and use Google. We see an opportunity to train the youth in digital literacy so they can use many other useful Apps related to safety and work, for example, Nirbhaya, e-Mahila-Haat, etc.

Finally, we tried to demonstrate how easy the transactions could be using cashless systems. Unfortunately, the India government promoted BHIM app could not be launched due to network unavailability and the *99# service (a non-Internet based method to do transactions) got connected, charged Rs. 0.50 for the transaction and then informed that the service is not available in the area.

Conclusion: Based on the analysis of the information collected via in-person interviews, we believe that these groups of users are not yet ready to move to a cashless system. The most important thing needed is the availability of the cashless services such as *99# and BHIM. Secondly, government need to enforce the employers to pay the minimum wages and deposit them directly in the bank accounts (not via checks). Finally, the transaction fee of Rs 0.50 is too large for such people and it should be waived for up to 20 transactions per month. People will also need some training on using the services and having confidence that they are safe and secure.