Money & Banking
DeMo Effect: Digital India leapfrogs 3 years in just 7 months
Owing to demonetisation and initiatives to promote card transactions on point of sales (PoS) terminals, card and digital transactions have increased stupendously post November 2016. After analysing data for PoS sales and digital transactions, it appears that demonetisation has brought India at least three years ahead in digital payments, says a research note.
 
In the report, State Bank of India (SBI) says, "If demonetisation had not happened, it would have taken three years more for credit plus debit cards transactions on PoS terminals to reach the current level of Rs70,000 crore, assuming a yearly growth rate of 25%. Post demonetisation, Indian banks have been able to set up 11.8 lakh extra PoS terminals. We believe that increasing number of PoS terminals and ease of doing digital transaction will increase this level further."
 
According to the report, similar trends are observed in case of usage of pre-paid instruments, including m-Wallet, PPI cards, and paper vouchers and mobile banking too. Prepaid payment instruments (PPIs) witnessed a sharp growth, with transactions worth Rs10,700 crore in May 2017, compared to Rs5,100 crore in November 2016.  
 
Seven months after demonetisation, the transaction value is quite large and approximately double of what it had been in the corresponding month and period last year, the report says.
 
SBI feels that such digitisation will result in lower inflation. SBI estimated a simple regression model by taking headline consumer price index (CPI) inflation as dependent variable and credit plus debit cards transactions on PoS terminals in rupees billion (DCPoS) as independent variable. 
 
 
"The estimated model was statistically significant and the results indicate an increase in Rs 100 billion transaction by credit plus debit cards at PoS terminals will lead to around 1.1% decline in CPI inflation, ceteris paribus. This augurs well for a lower inflation regime going forward. We also believe that combined with a structural change in food inflation regime that we are witnessing
India is well poised for a favourable growth inflation mix in the coming years!" SBI added.

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COMMENTS

SRINIVAS SHENOY

2 months ago

I feel if proper payment security measures are in place, the volume of card transactions will significantly improve in the days to come.

Beena Kothari

2 months ago

Its a good sign. I favour digital transactions in most of the cases. But it cant be undertaken just by learning to do it. One must be educated about how to handle those products without hurting themselves due to ignorance.

Paytm acquires majority stake in ticketing platform Insider.in
E-wallet platform Paytm on Thursday announced it has acquired a majority stake in Insider.in, a ticketing platform of events company OML Entertainment, for an undisclosed sum.
 
Paytm has been expanding into the events ticketing industry that is currently pegged at Rs 4,000 crore, with online ticketing accounting for 10 per cent of the overall volume.
 
"Digital discovery and events marketing expertise will increase supply of quality events in India. This is a natural extension for us as we continue to build India's go-to destination for online movies and events," said Madhur Deora, Chief Financial Officer, Paytm, in a statement.
 
Insider.in provides tools, data and analytics to organisers that enables them to conceptualise, market and execute their events. 
 
"Our partnership with Paytm will enable us to reach more organisers and event goers, and exponentially grow this ecosystem in India," added Shreyas Srinivasan, CEO Insider.in.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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Data from India helps Bangladesh prepare for floods, but Assam reels
As the monsoon begins, some parts of Bangladesh are already flooded, and the Brahmaputra and Ganga rivers are expected to burst their banks sooner rather than later. But the people are now more aware of potential disasters thanks to improved flood forecasting and monitoring systems.
 
"We made a forecast for the ongoing flood in the Surma-Kushiyara basin prior to June 30, and now we are forecasting that the water level at many points of the Brahmaputra and Ganga might cross the danger level in the next three days," said Sazzad Hossain, Executive Engineer at the Bangladesh Flood Forecasting and Warning Centre (FFWC).
 
The projections made by the centre are based on data about water flow upstream in the Brahmaputra, Ganga, Teesta, Feni and Barak -- all transboundary rivers flowing in from India. It is provided to the Bangladesh Meteorological Department by their Indian and Chinese counterparts and gives the authorities more time to prepare and even evacuate the vulnerable residents if necessary.
 
Under bilateral agreements between the countries, India and China provide information twice a day during the monsoon to help Bangladesh update its flood forecasting systems.
 
India provides data from two points on the Ganga, five on the Brahmaputra, and one each on the Teesta, Feni and Barak rivers, while China provides river flow information from three points on the Brahmaputra river in Tibet.
 
People living in the Ganga-Brahmaputra-Meghna basin are used to floods during the monsoon season. Just last year, Bangladesh experienced a severe flood due to heavy monsoon rains in the Brahmaputra basin and in 2015, 200,000 hectares of Aman paddy and 50,000 hectares of vegetable fields were inundated with floodwater, according to the Department of Agricultural Extension (DAE).
 
In early June this year, heavy rainfall in Bangladesh and in Assam and Meghalaya caused floods in some parts of the country. Northeastern Bangladesh was badly hit, with the Surma river in Sylhet district flowing 72 cm and 78 cm above the danger level at two points.
 
According to the Bangladesh Water Development Board, the ongoing flood has affected several hundred people in the districts of Sylhet, Sunamganj, Habiganj and Moulovibazar, where 280 schools have been closed and around 300,000 people have been cut off.
 
But now that the country can learn about potential hazards a few days in advance, preparations can be made earlier. The DAE has made preparations to provide fresh Aman paddy seeds to farmers, in case crops are damaged by the floods.
 
"We have enough preparation to supply farmers Aman paddy seeds after the flood so that they can continue their cultivation," Chaitanya Kumar Das, Deputy Director of the DAE, told thethirdpole.net.
 
"Considering the FFWC's forecast, we have made preparations, including relief and rehabilitation mechanisms, to tackle the natural disaster," Abu Saleh Mohammad Ferdous Khan, Deputy Commissioner of Kurigram district administration, told thethirdpole.net. "We get enough time to evacuate people living in low-lying areas near the rivers."
 
Meanwhile, in Assam, over 1.25 million people have been affected by the floods, and at least 33 already reported killed. Major highways have been disrupted, and the famed Kaziranga National Park, home of the one-horned rhinoceros, is mostly under water, with animals seeking higher ground.
 
It is unclear why, if Bangladesh is better prepared for floods at least partially due to information shared by India, Indian states do not seem to be. In the past, the states of West Bengal and Assam have blamed lack of information from upstream riparians such as Bhutan and China.
 
The floods are a regular catastrophe, occurring year on year with comparable amounts of people affected. And while it is argued that India and Bangladesh must work together to deal with transboundary floods, the challenges for India seem to be as much within than outside its borders.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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COMMENTS

Deepak Narain

2 months ago

We believe in helping others and ignoring ourselves and our people. Otherwise, why would our government give away 17160.63 acres of our land to Bangladesh for a paltry 7110.02 acres of Bangla land while our own 'chicken-neck' (our only link to our North-East) continues to be as precarious as ever.

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