The demonetization of Rs 500 and 1000 currency notes brings to the fore several key issues. Those with plastic money and smart phones with various payment apps like PayTm etc., tended to suffer lesser than the person with no bank account and no debit/credit card. It is not just the poor who are facing the brunt of the demonetization process but also many in the rural areas who earn decent amounts but consider it safer to keep money in their homes than in banks. The Modi Government had set into action many plans to curb cash transactions. Money transfer by Government to the accounts of individuals who are to receive payment are now done electronically. The payee has to provide his/her bank account details and IFSC code for the money to be transferred. All these transfers and transactions are recorded. Big businesses no longer make cash transactions. Everything happens by cheque or electronic transfers. Now it took a long time for Government to start paying salaries by cheque. In Meghalaya it was only after militant outfits were regularly involved in bank heists that cash transactions were reduced and salaries to Government employees were paid in cash. Before that state and central government offices would draw huge amounts of cash on the first day of the month for salary payment, thereby posing great security risks. It is unbelievable that the value of crediting salaries to bank accounts of employees was not recognized until about twenty years ago. India, therefore, is way behind many other countries in terms of access to banking facilities.
The recent demonetization process might create a new revolution to push the banking sector to the last village and for people to realize the importance of banking. The Jan Dhan Yojan accounts opened for Indian citizens across the length and breadth of the county at the behest of the Modi Government, were mostly lying idle because not enough awareness was created on the virtues of banking and saving. Many others have, however, realised the utility of having a bank account when they started receiving their subsidies from LPG cylinders straight into their accounts. A country with such heavy cash transaction as India cannot hope to make economic progress because money is hoarded instead of being circulated by way of credit to the needy or for creating strategic public infrastructure.