Despite three weeks after the note ban, the cash crunch continues across the country, especially in non-metros, where people are still struggling to find lower denomination notes. ATMs and bank branches are still running dry.

The primary pitch and narrative of the demonetisation drive by Prime Minister Narendra Modi seems to have taken a major shift to cashless economy from the initial key highlights of war against black money, corruption and counterfeit currency. That’s the inference one can draw from the PM’s Mann Ki Baat speech on Sunday.

“Our dream is that there should be a cashless society. This is correct that 100 percent cashless society is never possible. But we can make a start with less-cash society, then cashless society will not be a far-off destination,” Modi said in the programme.

A significant part of the radio programme was devoted to the youth with the PM calling out to make the transition happen first to a ‘less-cash economy’ and a ‘cashless’ economy later. There was mention about black money, but the core of the talk was change to a cashless economy.

The PM urged people to start using cash substitutes like debit cards and digital wallets, saying it will make transactions cheaper and easier and in the long-term it will help India "leapfrog into a less cash-use economy at par with more developed nations."

"We are also urging banks to make a big push with PoS (Point of Sale) machines with traders so that debit card use becomes more prevalent," Modi said.

Interestingly, Reserve Bank of India (RBI) governor, Urjit Patel too shared his mann ki baat on the same day, after a stoic silence on the note ban and three weeks after the announcement.

In an interview to PTI, Patel urged people to start using cash substitutes like debit cards and digital wallets. The central bank governor said it will make transactions cheaper and easier and in the long term. It will help India "leapfrog into a less cash-use economy at par with more developed nations."

"We are also urging banks to make a big push with PoS (Point of Sale) machines with traders so that debit card use becomes more prevalent," the RBI governor said. The RBI is monitoring the situation on a daily basis, he said, urging people to start using cash substitutes such as debit cards and digital wallets, which will make transactions cheaper and easier, Patel said.

Clearly, the common factor in both Modi’s and Patel’s talk is migration towards a cashless society, especially targeted to the youth, rather than black money. Migration to a cashless society is obviously a good thing given that electronic banking transactions would be easier and more transparent than handing over cash. It can cut down the time taken per transaction and wouldn’t require people to carry cash to wherever they go. But, as PM Modi mentioned in his programme, a good number of people are still hesitant to use their mobile or internet banking, E-wallets and Unified Payment Interface (UPI) for banking transactions. The idea of transformation to a cashless economy, though will take time in a country 70 percent of which still lives in cash economy, is welcome but one cannot deny that there has been a clear change in the demonetisation narrative by the Modi-government and in its pitch.

To understand this, take a closer look at the first press release of demonetisation announcement by the government and PM’s speech on 8 November where he announced the decision to ban Rs 500, Rs 1000 notes from the banking system.

“With a view to curb financing of terrorism through the proceeds of Fake Indian Currency Notes (FICN) and use of such funds for subversive activities such as espionage, smuggling of arms, drugs and other contraband into India, and for eliminating Black Money which casts a long shadow of parallel economy on our real economy, it has been decided to cancel the legal tender character of the High Denomination bank notes of Rs 500 and Rs 1000 denominations issued by RBI till now. This will take effect from the expiry of the 8th November, 2016,” the government release said.

The release spoke extensively on the black money issue, cited a 2010 World Bank study to say that the estimated size of the shadow economy for India grew from 20.7 percent of the GDP in 1999 to 23.2 percent in 2007 and listed the steps taken by the Narendra Modi-government in last two years to curb black money. There was no mention about change to a cashless society.

In PM Modi’s speech too, there was no major references on shift to cashless economy, with the major focus of the demonetisation being projected as war on black money, terror funding and corruption. “To break the grip of corruption and black money, we have decided that the 500 rupee and 1,000 rupee currency notes presently in use will no longer be legal tender from midnight tonight, that is 8 November 2016… This step will strengthen the hands of the common man in the fight against corruption, black money and fake currency.”

When will the cash crunch end?

On the other hand, despite three weeks after the note ban, the cash crunch continues across the country, especially in non-metros, where people are still struggling to find lower denomination notes. ATMs and bank branches are still running dry. This is despite the assurances by the government and the RBI that there is enough cash in the system to cater to all customers and the government mints are working in full capacity. But, it is doubtful that whether the assurances are reflecting on the ground. Instead of assuring again, a presser by the RBI governor Urjit Patel addressing the public to detail the cash situation in the banking system would have been far more effective.

As Firstpost has noted before, there is also a price the economy will have to pay as the cash drought is likely to have hit economic activities badly. A clear picture would emerge only after a few months though. On the other hand, it is unlikely that the actual effect of the currency ban on black money, corruption and counterfeit notes will be much given that the measure alone doesn’t address the problem and would need steps beyond demonetisation. PM Modi has assured follow up steps. One needs to wait and watch. But, at this stage, there is a clear, notable shift in the demonetisation pitch.