Kuldip Maity

The retail payments scenario is changing fast with the introduction of the electronic payments services in India. Not only that it’s also having a huge impact on black economy by creating greater audit trail on transactions.

There is believed to be a direct correlation between non-cash payment environment and corruption in any economy. The countries which rely more on non-cash payments have greater audit trail on transactions that naturally tend to limit scope for corrupt practices.

The country that comes to mind immediately in this context is Sweden which is expected to go totally cashless by 2020 and is known as the least corrupt nation on the world’s economic map. India’s traditional dependence on cash in market transactions, on the other hand, tended to provide a happy playing field for a thriving black economy as it made evasion of transaction audit easy.

Things started changing in India from 2005 when the clearing system went fully electronic. This cleared the field for creating instantaneous electronic payments and triggered the evolution of payment instruments like e-wallets, UPI and NEFT among others.

India has traditionally been recognised as a hugely cash dependent economy with retail accounting for a huge proportion of it. Things have however started to change and non-cash transactions have started to pick up after the electronic payments system was introduced in the economy. According to the World Payments Report, 2018, by Capgemini and BNP Paribas global non-cash transactions grew by 10.1 per cent to reach 482.6 billion. The growth was largely triggered by the Emerging Asia that saw a growth of 25.2 per cent adding hugely to the rise in global electronic transactions. Adoption of mobile payment by India saw a growth of 33.2 per cent in this specific area. We however need to keep in mind that this growth happened on very low base.

Keeping in mind that the demonetisation in 2016 hugely spurred the transition to digital and other electronic payment systems, we must also not lose sight of the fact that we still have a long way to go before we reach any level comparable to countries like Sweden.

We must also remember that electronic payment system, in order to be comprehensively available, needs saturation coverage of electricity and net connectivity. Then there is also the issue of cost in a country like India. POS machines, digital connections and hardware are still beyond the reach of many. And there is of course the other issue of a platform that can channel all modes of electronic payments.

However, things are improving fast. Payment infrastructure is improving by leaps and bounds. Awareness about the ease of payments through electronic mode is also rising. But more importantly the greatest push is and would be sustained by the retail network. Retailers are increasingly getting wiser about the cost of transacting in cash – both from safety and the cost perspective. Transacting electronically is less costly as it takes away the hassle of storing cash and providing changes to the customers. More and more retailers therefore are insisting on the electronic payment route which is directly adding to the surge in the adoption of electronic payment facilities by the customers.

Across the economic strata, barring the extremely rich, health and prosperity are highly correlated. A thumb rule says that a patient suffering from malignancy requiring treatment spaced out over a period of ten years would require Rs 50 lakhs at the least. An extreme example but is a pointer as to what a healthcare cost may do to a family’s economic situation. Insurance helps but how many people can afford the premium required to sustain this degree of coverage?

Now as we go down the economic pyramid the situation becomes even more critical. According to an assessment made by the Public Health Foundation of India it is found that between 1993-94 and 2011-12 more than 5.5 crore people were pushed below poverty line due to out of pocket expenditure on heatlthcare.

The enormity of the issue becomes even more glaring if we compare the South Korean population of 5.15 crore with the number of people pushed down below the poverty line as assessed by the Public Health Foundation of India. Ayushman Bharat scheme is expected to chip in substantially in alleviating the situation. But considering the fact that we have just about one doctor per 1000 population the problem in the healthcare sector becomes even more glaring.

Illness therefore tends not only to have a debilitating impact on health but also tends to take a heavy toll on the economic well being as well. Because illness prevents one to be an active participant in the labour force. This in turn takes away the person concerned ability to earn denting heavily the wherewithal of his or her family. The chain however doesn’t stop here. Being ill necessitates a flow of care services. At the lower stratum this flow is sustained by family members. The necessity of providing care further dents a family’s ability to earn further as the care giver also needs to withdraw himself or herself from whatever economic services that he or she may have been engaged in. Understanding of this dynamics doesn’t require a lot of theoretical inputs and by extending this understanding we can easily grasp the implications of the results of the survey that I stated at the beginning.

The point to note here is that if the illness were not to claim such a huge casualty in terms of economic well being all these families would have retained their prosperity at the least if not would have prospered further. In the context of the Indian poverty alleviation dynamics therefore preventive healthcare takes up an importance of serious proportion. A creation of a preventive healthcare infrastructure could lead to creation of higher prospects for prosperity among families not only at the base of the pyramid but also among families occupying various higher strata of economic well being.

As a social entrepreneur involved in fighting poverty through awareness and economic empowerment I am often asked about our exclusive preference to do so by using women as the exclusive change agent. People tend to question this bias. The question generally is raised by specially those who are not exposed to the development paradigm as it has evolved over time.

In our field, we refer to women as the strategic gender. Those who question our female preference generally know the answer but they do so in their elements and again generally do not connect the issues to get to the bottom of it. Why do we refer to women as the strategic gender? We know that awareness varies inversely with the level of deprivation. Greater the level of deprivation, lower is the degree of awareness. Let us keep ourselves focused on economic deprivation.

It’s a common knowledge that awareness and economic empowerment lead to sustainable fight against poverty. It’s also an accepted fact that an aware mother will keep her children aware. If women are economically empowered they will have greater right to have a say in the daily life of the family. And it’s also an accepted fact that a socially empowered mother will strive the hardest and will put priority on making her children aware through education. And education is the greatest poverty buster as it empowers and creates awareness.

Having laid out the general dynamics let’s take the remaining space in expanding the theme. As has been borne out by our experience and the experience of various international development agencies, a programme of women empowerment through microcredit and a 360° awareness building has a huge impact. Providing small investible sum in the hands of a poor woman with family and teaching her the use of money along with related awareness issues creates a source of earning for her.

As a DFID study on families in the char of the river Jamuna, which corroborates our experience, shows that in as little as 18 months the women have greater economic independence. That empowered them to have a say in family issues like children’s education, number of children the couple should go for, household expenditure specially in the choice between necessary and wasteful expenditure, investing in stuff that would help generate further stream of income. Also the incidents of family violence also tends to decrease. And these are the stuff that the poverty alleviation programmes target at.

Disempowered women hardly realise that by limiting their ability/right to move in social spaces, men tend to take away their right to awareness. However, it’s important to realise that awareness is a necessary condition for empowerment. However just being will not earn them the empowerment they search for. They need to be economically empowered too. Once they are put on this track, their self esteem goes up and by gaining greater say in the family issue they regenerate the cycle of empowerment thereby making the process sustainable.

Why not men? The empirical and experiential evidence shows, as has been explained above, that investing in women has a bigger impact – that’s why.

In my life as a social entrepreneur the issue of attitude has never failed to keep me engaged and intrigued. The question that why some people fail to carry colleagues along in a task that is easy while some others manage to wade through difficult terrain with colleagues following them unflinchingly cries out for answer in every sphere of life. For a manager, though, this question turns into a matter of life or death as the issue of delivery is crucially linked to the answer. And for a social entrepreneur this one becomes an issue of survival.
What is more interesting is the fact that while the behavioural experts had kept their inquiries focused on impact of negative attitude, the contribution of positive attitude remained much neglected – probably because it was thought that the restrictive impact of the negative attitude would by itself shade light on the liberating impact of the positive attitude. In other words, and using a simple analogy, if you don’t kill a person you have allowed him to live. But things are not that simple. Because there are more ways to kill than physically, and life has more meaning than one which is physical.
We know it experientially that a person who can smile even in adverse conditions is easily endeared than someone who is grumpy. But in terms of productivity what does it mean? Well being grumpy is not necessarily being negative, but being sceptic is. Those who at the first light of a challenge steps back or doubts whether he can face it is less likely to succeed than the one who takes up the challenge thinking that if someone else can do it why not she?
This is where a positive attitude plays its part in productivity. As Barbara L. Fredrickson, a researcher in the Department of Psychology, University of Michigan, in her paper titled ‘The broaden-and-build theory of positive emotions’ writes “positive emotions broaden the scope of attention, cognition and action and that they build physical, intellectual and social resources.” And she further writes, “Positive emotions signal optimal functioning not just for the present but over the long-term as well.”
Broken down into essentials it means that positive emotions broaden thought-action repertoire. That is if one has a positive attitude one tends to focus more, has better ability to look at a problem in its essentials without being pulled back by an apprehension of failure and can act to solve the issue faster. A person with such an ability can not only successfully deliver, she also creates an environment of ‘can-do’ around herself. An attitude of this type is just not a short term spark but being a part of her persona is a long term thing.
Anyone with this attitude therefore naturally not only tends to have a higher productivity, but also inspires an environment of higher productivity as positive emotions are also quite infectious. To quote Barbara again as I close this blog, “Positive emotions create psychological resilience… enabling flexible and creative thinking.” And creative thinking is key to growth in any field of economic activity among others. This is why positive emotions are so important in raising productivity.