Demonetisation: Modi's cashless economy dream is a reality in this tiny Gujarat village
Imagine a place in India where you don’t need cash to buy a packet of salt or other groceries. Welcome to Akodara
Imagine a place in India where you don’t need cash to buy a packet of salt or other groceries. A place where you don't need to stand in long lines to exchange your old currency notes at a bank, or queue outside an ATM to withdraw your own cash. With the current cash crunch such a place would be heaven on earth. After all, if you too have faced currency problems, after Prime Minister Narendra Modi announced the demonetisation of Rs 500 and Rs 1,000 notes on 8 November, you are not alone. Almost every nook and cranny of the country is facing this issue.
But, that’s not the case for the villagers of Akodara, a tiny village situated in the Sabarkantha district of Gujarat. It's around 90 kilometres from the state’s financial capital Ahmedabad.
ICICI Bank adopted the village in 2015. It has now virtually gone cashless using digital technology. Jotsnaben Patel, a teacher says, “Here most local financial transactions happen via mobile banking, card payments and net banking instead of cash. It’s India’s first digital and cashless village.”
Many transactions of up to Rs 5000 happen via SMS mobile banking. A simple SMS from the buyer via the bank’s payment gateway; and the payment directly reaches from the buyer’s bank account into the shopkeeper’s bank account within seconds. Doing away the need to handle cash.
Each of 250 households of Akodara has a savings account, and 1,036 adults of the 1,191 total populations have savings accounts. The bank trained the villagers to adopt the technology.
A villager told Firstpost, “Because of digital banking, we haven’t faced any inconvenience after demonetisation . Our neighboring villages have faced cash crunch issues. We use our mobile phones in four- five shops in the village to make the payments. When we used to handle cash, we used to spend it. Now we all are saving, and it’s become a habit.”
There’s an ATM located in the village by the bank, which is used mostly by villagers from the neighbouring village of Chhadarda. “After demonetisation, the villagers of Akodara did exchange their old currency notes at the bank, most people in the line were from neighbouring places,” says a local shopkeeper known as Patel Bhai.
The village even has its own website: http://akodara-digitalvillage.
The village panchayat has access to the latest price of agricultural commodities on NCDEX via an internet facility provided by the bank. The village has an almost 100 percent literacy rate, and mobile banking is done in both English as well as Gujarati.
Among other digital initiatives, Sabar Dairy, aka the Sabarkantha District Cooperative Milk Producers' Union Limited has now built animal hostels for the village. Patel Palakh Kumar Suresh Bhai, a dairy farmer says, “Every villager keeps his cattle in the animal hostel. The Sabar dairy tanker comes and collects milk from the hostel in the morning. And, milk is tested on the spot.” The amount is credited into the villager’s account every 10 days.
This move has worked well.
Firstpost visited a few dairy farms in the Anand district, and the owners were struggling to buy fodder for their cattle due to cash crunch issues. But, the dairy farmers in Akodara bought, the fodder using their debit card with just one swipe. The dairy farmers in Anand district could not buy an adequate quantity of fodder for their cattle, which resulted in a lower production of milk. That wasn’t the case at Akodara.
The village has primary, secondary and higher secondary schools, equipped with smart learning and teaching solutions like smart boards, computers, tablets and the like. A school management system to make the teacher’s life easy it may well be, but it also does away with the mundane task of taking daily attendance. Pinkesh Rawal, a teacher says, “Now the children swipe their cards for attendance; they find this activity very exciting. The audiovisual mode of learning has increased interest in learning among students.”
There’s a community-owned reverse osmosis-based water treatment plant and a WiFi tower for internet connectivity to those who want to subscribe to the service. Plus, there are three micro ATMs — at the gram panchayat, the village-level cooperative society and RO plant.
Hemant Bhai, a local taxi driver says, “I drive a taxi across the state of Gujarat. I have seen every village here. In the current cash crunch, truly, the villagers of Akodara are sukhi (happy).”
Firstpost sat a few feet away from the general story near the ICICI Bank branch to watch and in the matter of half-an-hour or so, we saw three transactions. The first was conducted using a mobile phone. The second was done using hard cash and the third, without any payment, carried out by an elderly lady. When asked if she uses the mobile payment option, she said, “I come and buy all that I need; my son visits the shop every few days and pays the bill via his mobile phone.”
When we spoke to a young lady about the cash payment (the second transaction), she replied, “I'm buying a Rs 5 chocolate bar for my child. I am not going to use an SMS for such a small transaction, am I?”
How India’s first digital village came into being
On 26 May, 2014, Modi took charge as Prime Minister of India. Within a year, he launched the Digital India campaign (1 July, 2015).
The campaign was committed to connect rural India with high speed internet networks, create a digital infrastructure, and improve digital literacy in the country.
ICICI Bank wanted to participate in the government initiative, along with its own goal to impart financial literacy to citizens.
ICICI Bank's CEO Chanda Kochhar said during the launch of India’s first digital village in 2015, “It is the prime minister's dream that India becomes digital. When we think of the word 'digital', what comes to our minds is big countries, and big cities. India has six lakh villages; we wanted to make one village in India 100 percent digital. The village we choose was Akodara in the Sabarkatha district of Gujarat.”
The decision was taken to convert one rural village into a 100 percent digital village. The bank shortlisted six or seven villages. One important criterion was the level of financial literacy of the villagers. Akodara has literacy levels of almost 100 percent. There are 1,015 literate people and 176 illiterate ones in this village with a total population of 1,191. Another important factor that worked in Akodara’s favour was its animal hostel. This is Asia's first animal hostel, and was launched in 2011 by Modi when he was the Gujarat chief minister.
ICICI Bank had already set up its branch in Akodara two years ago. Within four months of setting up of the branch, the bank started working on the digital village project.
Initially, the bank had 100 accounts opened; at present, there are around 1,200 accounts and every household in Akodara has a bank account.
The bankers trained men, women and senior citizens, for mobile banking via SMS as well as imparted knowledge about financial literacy.
The bankers worked closely with the gram panchayat, agri-sale mandi and the milk sale co-operative society. This ensured that all institutions were part of the financial literacy initiative as well as the digital cashless economy initiative. By 2 January, 2015, the village had gone 100 percent digital, where almost everyone went cashless for daily financial transactions.
The banks also launched other initiatives, like school automation, WiFi connectivity, a village website, a digital screen for commodity prices at the bank branch and skills development workshops for women to learn tailoring and office administration free of cost.
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