‘7 yrs after demonetisation, realty, households still run on cash’

A staggering 76% of those who bought property in the seven years since demonetisation said they had to pay a part or all of the purchase amount through cash, while 56% said that in the past 12 months, up to 25% of their monthly expenditure has been in cash and without any receipt, according to a survey by LocalCircles. This comes in spite of the rise in UPI and other digital modes of payments.

"Citizens over the last several years have shared how cash continues to be a sizable part of property transactions, right from advances to final payment and through the registration process, cash is a must," LocalCircles said in a press statement on Tuesday, sharing results of the survey. It said that it had received over 44,000 responses from citizens located in 363 districts of India.

Survey results

When asked what percentage of purchase of land, flat, house, shop, office or other property had to be paid in cash since demonetisation in November 2016, 15% of the respondents said that they had to pay over 50%, while 28% said they had to pay 10-30% in cash. In all 24% said they had to pay no cash, down from 30% last year, LocalCircles said.

Some 8% said they pay 50-100% of their household expenditure in cash, while 18% said they pay between 25-50%. 

Surprisingly, 59% of the respondents said they paid cash for a sizeable portion of groceries, eating out and food delivery in cash. These are the categories in which online or UPI payments are now considered normal in urban areas.

Around 15% of the respondents said they used cash to pay for daily household expenditure and even long-term assets like property, jewellery and used cars. Some 14% said they paid their domestic help in cash, while 18% said they paid cash for home repairs and personal services, without any receipt.

"Some traders, despite having large volumes, still prefer dealing in cash, primarily to evade taxes. Similarly, many of the street vendors and shopkeepers in tier 3 and 4 towns and rural India still refuse digital transactions or simply prefer dealing in cash," the survey stated.

Cash in circulation in the Indian economy has increased from Rs 17 lakh crore in November 2016 to Rs 33 lakh crore in October 2023, according to the survey.