When will India's first cashless island go truly cashless?

Sunzu Bachaspatimayum *

Loktak, Thanga and Karang :: 2011 :: Pix - Sushil Khomdram

If you google the name of a tiny lake island of Manipur called Karang, the results would all point to one thing – how Karang is the first cashless island of India. The Union Ministry of Electronics and Information Technology made this announcement under its Digital India programme in January 2017.

The Quint went for a reality check to the 2.27 sq km island in the middle of Loktak, the largest freshwater lake in northeast India, and found out that cashless transactions still elude Karang.

Karang, a Cashless Island, But Only Technically :

Contrary to the official claim that was made four months ago on 13 January, none of the 16 merchants of the island and the seven boat service providers have swiping machines nor do they use cashless transaction applications like e-wallet, USSD (Unstructured Supplementary Service Data) that enable money transaction in 2G mobile phones, UPI (United Payment Interface) and AEPS (Aadhaar Enabled Payment System).

The Quint learned that officials of the district e-governance society of Bishnupur, under the aegis of the Department of Information Technology, government of Manipur, conducted an exhaustive three-day sensitisation programme under DFAA (Digital Finance Inclusion and Access Awareness) from 9 to 11 January. As part of the programme, the e-wallet mobile application – SBI Buddy – was incentivised among the participants of the programme by offering Rs 10 to those who installed the e-wallet, and additionally pocketing another Rs 10 for effecting the installation of the mobile app on a fellow islander.

With over 400 beneficiaries installing the e-wallet, and the DFAA programme having covered 700 persons, Karang technically fulfills the criteria for being declared cashless under the guidelines of the Union Ministry of Electronics and Information Technology (MeitY).

The MeitY criteria says that a village or island can claim being cashless if any one member of every household in the village is sensitised about cashless transaction, and at least 50% of the villagers use any one of the five cashless transaction applications – e-wallet, USSD, UPI, AEPS or POS (Point of Sales) machine.

Cashlessness Eludes the Tiny Island :

Based purely on technicalities, the Gram Panchayat of the island on 13 January declared Karang as the first cashless island of India, with the Deputy Commissioner of Bishnupur and Additional Director of the department of IT of the government of Manipur affirming the claim by signing as witnesses, among other functionaries.

Four months after earning the distinction, Karang, unfortunately, is nowhere near being an island that conducts most of its business cashlessly. The infrastructure for actualising such transactions is simply not in place.

Oinam Satyabati Devi, a member of the Thanga-Karang Part-1 Gram Panchayat, who incidentally is one of the functionaries who signed the Karang declaration, admitted that the island, which has a population of 1,859, is yet to become 100 percent cashless.

For this sorry state of affairs, the elected representative hints that the IT department may have lost interest in the island in carrying out the much-needed hand-holding exercise even before the incubation period is done.

The department of IT is delaying the provision of the basic infrastructures needed for our island to become truly cashless. For instance, we have demanded 25 POS machines or swiping machines, but these are yet to be given. We've also applied for three Common Service Centres (CsCs) and even these are yet to materialised. I can't grasp why the department is delaying the process after successfully generating the hype about going cashless – Oinam Satyabati Devi, Gram Panchayat Member

'Islanders Not Committed to Making Cashlessness a Reality' :

Dillip, a boat service provider who is one of 400 beneficiaries of the SBI Buddy e-wallet, expressed his disgust at the way things are, especially considering the fact that Karang's achievements have been widely reported by the media.

"The cashless declaration is turning out to be only for namesake. The government has neither provided POS machines nor set up CsCs in the island. It's shameful. " Prasant Oinam, an official of the district e-governance society of Bishnupur, who played an instrumental role in Karang's achievement, lamented the delay in transforming Karang into a 100 percent cashless island, but he remains mute on why his parent IT department is seen as changing its stance after registering the significant national achievement.

He is, however, quick to reveal that the delays in providing the POS machines and setting up the CsCs are due to the gaps in the islanders' capabilities to fulfil the mandatory requirements for such a provision.

Although most Karang families opt for a cashless transaction, they are not committed enough to translate it into a reality. For example, for a bank to provide a POS machine, the beneficiary should open a current account with a minimum balance of Rs 10,000. Even after this hurdle was done away with, after much persuasion by the department, the merchants and the boat service providers have yet to submit the mandatory documents like Aadhaar card, Pan card, cancelled cheque and a photocopy of their account's passbook – Prasant Oinam

On digging deeper into the matter, islanders alleged that while all of the 297 households in the island have Jan Dhan bank accounts with UBI under the Pradhan Mantri Jan-Dhan Yojana, the bank-assigned business correspondents have not provided their chequebooks, passbooks, nor their RuPay cards unless they are paid Rs 100 – Rs 200.

The story of Karang island is typical of a society in which the state is anxious to stake claims of achievement and a public keen is to enjoy the fruits of development, but is beset with a system crippled by rampant corruption.

One hopes that the gaps in realising Karang's cashless dreams can be plugged with the same enthusiasm as showed in the run-up to making the claim.