Currency woes likely to continue for people in Andhra Pradesh

Amaravati: People of Andhra Pradesh will have to endure the "currency woes" for some time to come as the state government has given up hope of either getting more cash from the RBI into the banks or introducing cashless transactions on a massive scale in the near future.

Chief Minister N Chandrababu Naidu, who for the past few days has been constantly reviewing the situation with bankers and state government officials, told the State Level Bankers Committee that "I have no hope that we will get more currency notes of smaller denominations".

After two letters from the Chief Minister, the RBI dispatched Rs 2,000 crore worth currency notes to the state two days ago.

Of this, the new Rs 2,000 notes amounted to Rs 1,500 crore, new Rs 500 notes amounted to Rs 90 crore, Rs 100 notes Rs 400 crore and the rest of other smaller denominations.

"I have sought another Rs 5,000 crore, mostly in Rs 100s. But I have no hope we will get the money," Chandrababu remarked at the five-hour meeting with bankers and state officials last night.

At the same time, he wanted to introduce Point of Sale (PoS) swiping machines to enable cashless transactions, using credit and debit cards, but the companies which supply these machines told the Chief Minister that it would take more time to make the gadgets available as per demand.

Besides, the Chief Minister wanted the 14 per cent service tax and 1.25 to 2.25 per cent service charge on card and mobile transactions waived off so that people could go for cashless transactions.

Now either the merchants or consumers were bearing the service charges which was proving a "disincentive", he noted.

The CM also wanted the Centre to supply PoS machines at a subsidy of 80 per cent to merchant establishments.

"The costs involved in printing and distributing the currency and also the wear and tear are very high compared to the benefits of cashless transactions. So the RBI should compensate in this form," Chandrababu pointed out.

But, there was no firm assurance from the banks on the service charge, while the service tax has to be waived by the Central government.

The state government wants to introduce PoS machines in certain departments that involve currency transactions with the public.

The State Road Transport Corporation requires 2,500 PoS machines, rythu bazaars 80, tourism department 100 and Mee Seva centres 5,540.

Besides, 16,452 swiping machines are required for as many villages to ensure transition to a cashless economy, according to Finance Secretary K Sunita.

Verizon, one of the companies that manufactures and sells PoS machines to banks, said it could supply 1.20 lakh gadgets by the end of December.

Ingenico, another company in the same business, too was ready to supply those many machines by December end. But they have to cater to a pan-India market.

With RBI coming out with fresh guidelines that the PoS machines have an integrated biometric scanning system, deployment of these gadgets may get further delayed.

However, the Chief Minister set bankers a 40-day deadline for rolling out cashless transactions "to the extent possible", even as he said that all government transactions would be made online from December 1.