After note ban, will Modi govt now ban cheque books for its digital push?

CAIT Secretary General Praveen Khandelwal said the government needs to encourage the use of debit and credit cards

After deciding to revoke the legal tender of Rs 500 and Rs 1,000 currency notes in November last year, the Narendra Modi -led central government might now be working on another disruptive step to boost digital transactions — banning the cheque book. A senior functionary of the Confederation of All India Traders (CAIT) on November 16 said the Centre might withdraw the bank cheque book facility in the "near future" to encourage digital transactions.

CAIT Secretary General Praveen Khandelwal said the government needed to encourage the use of debit and credit cards. "In all probability, the Centre may withdraw the cheque book facility in the near future to encourage digital transactions," he said.

Impact of cheque book facility withdrawal

Demonetisation was a big disruption for most Indians, right from poor labourers to big industrialists. Now, the withdrawal of the cheque book facility could have a massive impact as well. Most business transactions are conducted through cheques. According to experts, 95 per cent transactions currently take place via cash or cheques.

Since cash transactions have declined, transaction by cheque might have increased after demonetisation.

Use of cheque in India

Cheques are fairly popular in SME payments. By taking a PDC (post-dated cheque) against the delivery of goods, a supplier secures payments due in future from its customer. People pay by cheques while buying land and house, too.

Many landlords now take rent from tenants via cheque. Since November 8, 2016, digital payments like BHIM have grown. However, their sweet spot has been small-value payments (two to three figures). The retail and commercial payment usage strongly suggests that cheque is a very compelling method of payment for large-value payments (four figures and above).

Growth of digital transactions

The Narendra Modi-led BJP government has been pushing for a less-cash society. While digital transactions have shown mixed trends since demonetisation, overall cashless payments are much higher than in the pre-demonetisation months. (more)

Why Modi is keen on 3rd & 'final' cabinet reshuffle before 2019 polls

Performers among MoS, including those with independent charges, are set to be promoted

The long awaited cabinet reshuffle of the Narendra Modi government, its third and possibly its final before the 2019 Lok Sabha polls, is set to take place by Sunday afternoon.

Laggards among the ministers are being dropped. Performers among ministers of state, including those with independent charges, are set to be promoted. Some of the leaders who have excelled in organisational work will be included in the council of ministers, and some ministers asked to return to party work.

New ally Janata Dal (United) will get representation. Existing allies, who need to be placated in the run up to the 2019 polls, could get more ministerial berths. There is still no clarity on whether AIADMK might be included in the cabinet.

However, the shape of the forthcoming expansion and reshuffle would highlight the failures of the Modi government on some of its key promises – job growth and skill development, improvements promised in the farm sector and Ganga rejuvenation.

Also Read : Is Modi winning fake currency war? A data you shouldn't miss

In 2014 Lok Sabha polls, the Bharatiya Janata Party (BJP) had promised 20 million jobs a year if voted to power. However, job growth has been abysmal, and significantly lower than the last three years of the UPA 2 government. The PM and BJP chief Amit Shah have argued how the MUDRA Scheme has provided loans to over 80 million people, which in turn has provided employment in the informal sector.

But it's becoming increasingly apparent that the over two percent dip in GDP growth, the impact of demonetisation and inability of the industry to invest resulted in poor job growth. The Modi government’s plans to impart skills to a large section of the youths has fallen way short of its targets. Rajiv Pratap Rudy, despite his hard work in what was a newly carved out ministry in 2014, couldn’t meet the PM’s expectations as the minister of state (independent charge) for skill development and entrepreneurship. (more)