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The new digital mode, Bharat Interface for Money app, is a fanciful toy. It’s time to get serious

By Parsa Venkateshwar Rao Jr

Give to the Prime Minister. He pursues an issue with a zeal and single-minded devotion. Critics would call it obsession. So, on December 30, he announces Bharat Interface for Money (BHIM) app, and he cleverly connects the acronym to
Dr BR Ambedkar. He wants to maximize the economic and political advantages.

What does BHIM app do? It is quite complicated though Narendra Modi like a good salesman makes to look easy. He says you do not need a smartphone. You do not need to have transaction charges to private financial service providers (FSPs) like Mastercard and Visa. All you need is an Aadhaar number. And about 100 crore have their Aadhaar numbers. And about a 100 crore have a mobile phone.

But the catch is lurking. At least, the shopkeeper’s phone has to be a smart one and he has to connect to the bank account of the consumer. It also presumes that the 100 crore with the mobile phones and with the Aadhaar card also have a bank account. But this is not the case.

In his eagerness to sell the idea of a cashless economy, the Prime Minister wants to leapfrog into a sci-fi scenario.

What does BHIM app do? It is quite complicated though Narendra Modi like a good salesman makes to look easy. He says you do not need a smartphone. You do not need to have transaction charges to private financial service providers (FSPs) like Mastercard and Visa. All you need is an Aadhaar number. And about 100 crore have their Aadhaar numbers. And about a 100 crore have a mobile phone.

He also does not recognize that a bank account does not accept a subsistence consumer, who earns daily wages and spends. The bank account is for the person who gets a reasonable amount at the beginning of every month and which he then spends over the month.

Technology is a means to an end. It is an end. Unless the lives of the people improve, unless all of them are earning reasonable livelihoods, digital payments do not hold any attraction for them. One has to get to back to the real economy, where agriculture, manufacture and services have to perform well. Financial inclusion should not mean the killing off of the informal sector. The self-employed are the mainstay because neither organized private sector nor the government can hope to provide jobs to millions of people. This is the mistake that VP Singh committed in 1990 when he announced government jobs for Other Backward Classes (OBCs) as part of meeting the Mandal Commission’s recommendations.

Prime Minister Narendra Modi should stop pulling rabbits out of the hat. The people are not amused. The reality is that the economy is sputtering. It is not a good sign.

Lead: Prime Minister Narendra Modi during the launching of BHIM app in New Delhi. Photo: facebook

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