Aadhaar, Poverty and Money

You may find something amiss here, so please ignore my eccentricities. I have set out to write something on money.

When you purchase any item or goods/service you are indebted to the person who provided you the service and hence to compensate him you pay him some money. That person in turn gets some other goods/service for himself and pays others with the money he earned from you.

People are so much interdependent on each other that we transact with money just too often to realize the true meaning of what a payment means. That we are increasingly dependent on each other and we should be thankful to each other for doing each others work in the best possible way.

I sought the help of google for the true meaning of money and gleaned some new information.

The first item on the search result was about a country(currency devalued-ringgit) and the author argued that we trade our lifetime for the salary that we earn. We work about 176 hours per month to earn the salary and we trade each day for that days earnings. If our currency gets devalued we get lesser than earlier and may not be able to afford goods that we once were able to.

The second item in the result list gave an exhaustive meaning of money: Money as survival, money as liberation, money as time, money as lubrication(read as greasing palms), money as status, money as keeping score, money as means, money as control, money as evil etc.

People are generally smart and since god has given equal intelligence, that cannot be a measure of wealth. Poor too are smart and are trying everything they can to make ends meet. Rich have not done anything great to achieve richness as has been amply substantiated by research at the Abdul latif jameel poverty action lab(JPAL). Of course there are exceptions. Poor remain poor majorly because their emergency expenditure on things such as medicare leaves them with little to live with dignity.

One important difference of developed countries from underdeveloped ones is the transparency in money flows. Richer countries have more transparent monetary transactions and their Cash-to-GDP ratio is low.

Sweden has turned cashless overtime and less than 2% of its GDP is circulating as free cash. This figure for India is around 13%. I read that in Sweden even the church/petty shops are carrying card readers. Banks have stopped taking in cash deposits and are busy disposing cash counting machines. You can guess how much of a transformation that is. Card companies are laughing their way to the bank as every transaction is getting them handsome commission.

We can learn from that country and try to predict by what time we too will go the same path. My estimation is that India will take considerably shorter time to go cashless. I think we will reach there in another 10 years ie by 2025 when our economy becomes 10 trillion US dollars.