Even as the government is rolling out incentives to promote digital cash transfers, there is encouraging evidence that a marked shift to a cashless economy is already underway.

November consumer inflation fell, but not as sharply as most economists were expecting it to. The fine print showed that demonetisation had not really impacted consumption of daily use goods, other than perishables like vegetables and fruits. But prices of fruits and vegetables had anyway been falling for the past four months; demonetisation only accelerated the slide.

Lesser-than-expected drop in headline consumer inflation indicates purchases did happen despite the shortage of currency in the system. Data for electronic transfers is also proof of that.

Numbers announced by the Law and IT Ministers show digital transactions have increased by 400-1,000 percent since November 8 when demonetisation was announced. These figures include transactions done through government channels and do not include those done through Visa and Master Card.

Government’s RuPay cards saw a 316 percent jump from 0.39 million transactions per day to 1.6 million, while e-wallets posted a growth of 271 percent from 1.7 million per day to 6.3 million.

Government’s Unified Payment Interface (UPI), still in its infancy, posted a 1,196 percent jump from 3,721 transactions per day to 48,238 transactions.

At the retail level, digital transactions as measured by those on point of sales (PoS) machines have nearly doubled from 5.02 million per day to 9.81 million.

There is a clear shift taking place with electronic transactions gaining acceptance. The real test of cashless transactions will be when enough cash is available in the market. Till then, the government can take some credit of pushing the country towards a cashless economy, even if that may not have been the primary goal of the demonetisation drive.