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Demonetisation: Inside India’s first ‘Cashless Village’

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80km from Ahmedabad lies Akodara village, which is home to some 1,200 people and hailed as a ‘Digital Village’ when PM Narendra Modi felicitated the sarpanch at a function in Mumbai on January 2, 2015. The state government has collaborated with a private bank on the ‘Digital Village’ initiative and initiated a cashless SMS-based banking system.

Despite the cashless system, Akodara is still affected by Demonetisation, as a good proportion of residents still dependent on paper money.

Digital village, demonetisation, Ahmedabad, Akodara, cashless, note ban, Gujarat, Prime Minister, Narendra Modi

According to a report, at about 12.30pm on Monday, no sooner had a cash van replenished the village ATM than six or seven people queued up. A steady stream of people was seen at the village bank branch too, making deposits and exchanging invalid notes.

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As quoted in the report, Vipul Patel, a pan shop owner, explained how the cashless system works.

“We SMS a transaction code, 1, 2, 3, 4 etc where, for instance, 4 is a transfer, followed by the recipient’s mobile number and then our account number,” Patel said. “It works for amounts from Rs 10 to Rs 5,000. The money is transferred directly into the account.” Amit Patel, who runs one of the six shops in the village, said: “On a normal day, I sell goods worth about Rs 6,000-7,000. Of this, about Rs 2,500 to Rs 3,000 is through the cashless system. It is mainly the youth who use it.” The older generation still uses cash, he said. “There are also labourers and other people who do not have full documentation, who depend on cash,” he said.

Digital village, demonetisation, Ahmedabad, Akodara, cashless, note ban, Gujarat, Prime Minister, Narendra Modi

“The younger people use the SMS system. Older people are not so comfortable with technology,” village sarpanch Tara Patel. “My estimate is about 60% of the villagers use it. So, unlike the cities, there have not been any major problems here after demonetization.”Pratik Panchal, the manager of the village branch of the private bank, said: “After demonetization, we did see a rush for the exchange of notes on November 10. We have about 1,200 clients from this village and others from nearby areas.” An account with the bank was mandatory for the cashless system, he said. “Our branch has fixed deposits of about Rs 25 lakh,” he said. Javanji Parmar, a farmer, said: “I only use cash for my transactions and there are lots of people like me. The impression being given out that nobody uses cash here is not accurate.”

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Seema Prajapati, a shopkeeper who was at the bank to deposit cash, quoted saying:

“My usual daily till is about Rs 7,000 and some 100 people buy from my shop every day. My estimate is more than 40% — the elderly and children — still use cash here. Taraji Parmar, 55, a customer at Prajapati’s shop, said: “I use only cash. I don’t even have a mobile. So there is no question of me using the payment system. With the notes becoming invalid, I too had trouble getting valid currency notes.”

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