Digitisation possible only with incentives, says Bengaluru-based NGO Kartavya

BENGALURU: Though the Union government is keen on increasing the footprint of cashless economy in the country, experts believe that mere ‘encouragement’ will not convince marginal and small traders to take up online transactions.

A survey done by city based NGO Kartavya explains why. The well-known Malleswaram market on Sampige Road has close to 30 vegetable vendors. The survey shows that among these vendors there is lack of awareness and misconception regarding online transactions.

“The vendors were very hesitant even to open a bank account as they fear Income Tax scrutiny. Also, the nature of their business requires them to have liquid cash to buy from wholesale markets, early in the morning,” said Sundar Mahadev, member of Kartavya.

The only time they use the bank and debit cards, was to obtain LPG subsidy. Those in the older age group do not know how to carry out bank transactions, handle a smartphone and are not aware that even regular handsets can be used for mobile banking. They are apprehensive about the safety issues caused by hacking and hence reluctant to shift to a cashless system, he said.

“We attempted to educate them about using their Aadhaar card to open an account. We told them that tax would not be levied on their whole amount, but after exemptions. Also, their savings account won't be touched as current accounts are used for business,” Sundar added.

The survey showed that the younger traders were willing to take up the change. However, more education and awareness would be needed to bring older traders into the loop, as they remained wary even after the NGO spoke to them.

The government while making such a drastic change, will have to consider helping small and marginal vendors, make a smooth transition, the survey said.