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The India of change: from the rupee to the digital rupee, a change to the QR Code


November 8, 2016 will remain a key date in Indian history with Prime Minister Narendra Modi's shocking announcement: "the current 500 and 1000 rupee bills are worthless as of midnight today!!! and will be replaced by 500 and 2000 available as of tomorrow, displaying the image of Mahatma Gandhi".

This is a blow for the millions of holders of these bills, and especially for those who had stored them under their pillows...

The Reserve Bank of India stipulated that demonetized bills could be deposited in banks within 50 days, i.e. until December 30, 2016. The bills could be exchanged at legal tender but the limit was Rs. 4,000 per person from November 8 to 13, then Rs. 4,500 from November 14 to 17, reduced to Rs. 2,000 from November 18 to 25. Finally, the exchange of bills was stopped completely on November 25, although the government had previously stated that the volume of exchange would be increased after that date.

This left very little time to bring them back to the bank... to declare the receipts... in short, to switch everything to "transparency"... a word that has difficulty to exist in India of course. India, queen of corruption, of haggling, of "benevolent" scamming, has difficulty in apprehending such a concept of transparency...

Reducing black money, an unfulfilled goal

Narendra Modi's goal was indeed to reduce the underground economy and thus reduce illegal activities and terrorism.

The result has not met the expectations of this radical action. The government had estimated that 5 trillion rupees, or about 20 per cent, of the demonetized bills would be permanently removed from circulation. According to a 2018 report by the Reserve Bank of India, 99.3 percent of the demonetized bills were returned to the bank, or Rs. 15.3 trillion of the 15.41 trillion demonetized bank bills. The undeposited bills were worth 107.2 billion rupees... Analysts deduced that this exceptional effort had not succeeded in eliminating black money from the economy.

More than that, it was estimated that about 1.5 million jobs were lost due to the fall in stock market indices (+6% the day after the announcement) leading to a reduction in industrial production and GDP growth rate...

What can I say about the "mess" (if I may say so...) that this has created...

A daily limit on ATM withdrawals was imposed, varying from 2,000 rupees per day until November 14 to 2,500 rupees per day until December 31.

This limit was then increased to Rs. 4,500 per day from January 1, and then to Rs. 10,000 from January 16, 2017. From November 17, families were allowed to withdraw Rs. 250,000 for wedding expenses. Farmers were allowed to withdraw Rs. 25,000 per week against crop loans.

International airports also facilitated the exchange of banknotes for foreign tourists and outbound travelers, worth a total of 5,000 rupees per person (that's not much... that's about 60 euros...).

Fuel pumps, government hospitals, railway and airline booking counters, dairies and ration stores recognized by the state government, and crematoria have been allowed to accept demonetized bills until December 2, 2016.

I was organizing a trip to Bodhgaya at the end of December 2016 - beginning of January 2017 and joined the endless queues at the ATMs... every day because we could not withdraw more than 4500 rupees by bank card per day! 4500 rupees, that's about 50 euros! imagine! you don't go far with that! so I had organized myself with several bank cards to be able to withdraw every day as much as possible and thus to be able to pay for hotels, restaurants, transports, etc... because in India it is of course often difficult to make people accept that you are going to make a bank transfer or to be able to pay by bank card....

For me, it was only 18 days of mess, but for the Indian people, it was several months of misery! Indeed, cash withdrawals from bank accounts were limited to 10,000 rupees per day and 20,000 rupees per week and per account from November 10th to 13th. This limit has been increased to Rs. 24,000 per week from November 14, 2016. Limits on cash withdrawals from current accounts/cash credit accounts/overdraft accounts were later removed.

The Reserve Bank of India increased the savings bank account withdrawal limit to Rs. 50,000 from Rs. 24,000 on February 20, 2017, and then on March 13, 2017, it finally removed all withdrawal limits from savings bank accounts.

During this period, more than 800,000 truckers and truck drivers were affected by this lack of liquidity with more than 400,000 trucks blocked on the main highways of India and endless queues at the toll booths which did not accept demonetized banknotes anymore!

Not to mention the numerous ATMs that were so often empty, robbed by a whole population in need of banknotes...

Queues so long that some people died as it is the case for Vinod Pandey, 69 years old, retired government employee, who collapsed in front of the Makronia branch of the Union Bank of India in the city of Sagar...

A digital shift to increase financial inclusion

In 2016, we could see the blue and white PAY TM sticker in many stores and stalls.

The push for digital payments was one of the stated intentions of demonetization.

In November and December 2016, there was an immediate and sharp increase in digital payments due to cash shortages. Debit card transactions at the point of sale were double the value suggested by pre-demonetization trends.

That same year saw the launch of UPI, India's real-time payment system that allows users to transfer money directly from one bank account to another. Instant money transfer, as it were.

Today, in 2023, no less than 260 million people out of India's total population of 1.4 billion will be using this system.

It is interesting to understand that the pandemic has really triggered this shift. In fact, in 2020, more than 48 billion digital transactions were made!

Mobile packages are offered at very attractive prices and the majority of the population now owns one. Thus, everything is now paid for through the cell phone!

This financial inclusion, which consists in providing access to basic financial services, is now extending to the underbanked and unbanked.

Towards an ever more digitalized evolution

Let's go back a bit. First, there was the introduction in 2010 of the Aadhaar, considered by the chief economist of the World Bank as the most sophisticated identification program in the world. Each person is associated with 12 identification numbers linked to biometric data, including a photograph of the face, fingerprints and a photograph of the iris. These 12 numbers are now associated with many services such as bank accounts, social welfare schemes, SIM cards for cell phones, ...

Then in 2016 it was the implementation of the UPI as we talked about above, followed shortly after by the implementation of FASTag.

FASTag is about cashless payment of highway tolls. We saw it in action on our last trips. A camera reads the license plate number of vehicles, from private cars to trucks, buses, cabs, etc.... This reading allows to display instantly the vehicle data on the computer screen installed in the toll booth. Thus, a cab that offers you an inter-city trip with a fixed fee + payment of the toll charges will be able to show you the total toll charges inherent to your trip upon arrival....

In 2019, the Indian government has launched e-RUPI. This is a digital voucher that the recipient receives on their phone in the form of an SMS or QR code. This allows for contactless, cashless payment and the recipient can redeem it without a digital payment app or online banking access or card.

From e-RUPI to electronic rupee

The e-RUPI is different from the digital currency envisaged by the Reserve Bank of India.

This digital currency, named for the moment "e-Rupee" is launched in test since today, Thursday 12 January 2023, in 4 cities (New Delhi, Mumbai, Bengalore and Bhubaneswar) and through 4 banks (Yes Bank, IDFC, ICICI Bank and State Bank of India).

This electronic rupee will have the same value as banknotes and coins and will be distributed by the banks. It will be possible to make transactions from a digital wallet stored on the cell phone. Payments will be made using a QR code.

"This is a bold move by the RBI that will help reduce the transaction costs of financial transactions," Lekha Chakraborty, a professor at the National Institute of Public Finance and Policy, told DW.

"This brings transparency to the financial system and helps entrepreneurs catalyze cross-border transactions," she added.

The QR Code to the assault of tourist sites and daily life

On our side, in a simple post-Covid trip at the end of 2022, we could see how much India is preparing for this digital revolution. If in Agra the entrance to the Taj Mahal is still done through classic ticket offices, in Bihar, some sites are now accessible ONLY through online payment. A QR code installed at the entrance of the sites now replaces the traditional counters emptied of their employees.

Moreover, more and more QR codes are displayed at the foot of statues, temples, etc... in order to provide the visitor with the necessary historical information.

Rickshaws also use this QR code system. In some cities, they register with the police who generate a QR code for them, thus allowing women to have the guarantee of being with a safe driver when they use this mode of transport.

The QR Code is now used in India in all sectors: advertising, newspaper articles (thus allowing to place more articles on a defined number of pages, the rest of the article being to be read digitally...,), to pay all kind of bills: gasoline, restaurant, travel, grocery store, etc...

Beggars are not forgotten

Raju Prasad, 42, made headlines in many Indian and international newspapers when he was caught on camera begging with his metal bucket and a tablet with a QR code stuck on the back.

People used to turn him away saying they had no money, while now many travelers transfer 5 or 10 rupees with a few clicks on their cell phones rather than taking out their wallets!

"Now, they scan my QR codes and gladly give the small amount they want" he says. This one even gained with the exchange, receiving much more money now than he received when he was at the "all-ticket"...

We have to admit that the fact that beggars and their donors are all part of the digital finance revolution in India helps explain the explosive growth of mobile payments.

Digital India, aided by Pandemic

Indians have been migrating to digital financial services for some time. This is partly because of growing wealth, better internet and more affordable technology - and because Prime Minister Narendra Modi has put digital transformation at the center of government policy.

Launched in 2015, "Digital India" aims for faster and more inclusive economic growth by pushing government and banking services online and bringing the country's masses of poor, especially in rural areas, into the formal economy through investments in technology.

But it was the pandemic that accelerated the change. The closures forced millions of people to buy groceries and medicine via mobile apps because they couldn't leave their homes. ATMs ran out of cash and people didn't want to go near them anyway for fear of catching the virus by handling physical money.

And what about us?

Ah la la ... let's say that we are living our last hours unless we suddenly wake up... the world is changing, very fast, that's clear. For me, each trip is an opportunity to discover the impact of a mutation to the QR code always more present and pressing. India is rushing, headlong, without hesitation, in a direction that is beyond us. While sacred cows are still king, while the traffic code manifests itself through a concerto of horns, while garbage is littering the streets without shame or embarrassment, digital India is going to nail us to the floor. It's obvious.

The Indian is by nature "adaptable". The hard life he is confronted with since his childhood makes him a being who is always ready to seize what must be seized. Every opportunity is a must. The mind works on the lookout. Ready to move towards the unknown, to achieve the unexpected and the unattainable.

On our side, the "us", are raised in a cocoon in the land of Care Bears. Everything is framed, framed, comforted. The slightest ripple is transformed into 10 psychotherapy sessions, the societal mold becomes the cabin, looking beyond is the impossible. The spirit is thus rooted in this shaped, controlled comfort, exhausting the capacities of adaptation of each one.

India has taken the gamble of digitalization and we have to admit that it is entering the leaders' court. The anti's and the complainers will tell me "yes but look, everything is rotten, the roads, the houses, the organization, etc.."

I disagree. The most important thing is indeed what goes fast. And what goes fast is the digital, the digital, and it is well on this aspect that India seeks to sit. From there, it will be able to expand its investments and its development.

I was able to see on my last trip at the end of December 2022 that India has launched the next step, the physical revolution.

This will be the subject of a new article on this blog. Roads are making their way, reshaping the countryside, cutting through villages, and flying over cities... This material aspect will be able to develop very quickly. In my opinion, it will be done in 2 phases. An immediate one, fast, to relieve some areas and connect others, then the revolution will come on top of that with, who knows, maybe solar roads charging vehicles and rickshaws?

Everywhere, absolutely everywhere, now the Digital India 2015 signs have been replaced by ONE EARTH - ONE FAMILY - ONE FUTURE on the occasion of the next G20.

So what is Narendra Modi's vision through this new vision?

Anything is possible with Incredible India. Absolutely anything is possible.

If you come on our travels, then you will understand all the meanings of that last sentence.

In the meantime, be well, but don't take everything for granted because the world is changing, the balance of the world is changing...


--> Teacher training is given from 1 person upward. Kathy is in Lu Jong 1 teacher training ending in July. Aurore and Mickael are in training until January. It is possible to join or start a new training course from 1 person, Info here.
--> Johnathan returns to do the last course of Tog Chöd training in Chamonix at the end of June 2024. Venerable Oser is starting the Tog Chöd teacher training with the first face-to-face course in June in Chamonix and is already getting the hang of it with the theory through access to the online extranet. You can still join this training. The next training of Top Chod will perhaps start in June 2027 (or perhaps 2025 or 2026), to be continued...

--> A Tog ChOd discovery weekend is offered to everyone at the end of June! Info here

-->  We will be in Thailand in May and June and can offer discovery sessions or modules B of Lu Jong and Tog Chöd teacher training in French and English: in Chamonix from the end of June to the end of September, in Tenerife in October, in Nepal at the beginning of November 2024, in Thailand in November and December, and on Reunion Island in January 2025. And last minute... the Kora Kailash trip will take place in mid 2026 (the previous one was in 2018.. .), but will be reserved for former students or former participants of at least one trip with us! so if you would like to organize a retreat or training at these locations, contact us!

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