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Today’s Talk on Editorials

Cash is not trash

  • A public sector bank is the latest to join hands in the war against cash. A report released by the State Bank of India last week states that thanks to demonetisation, India has seen a huge increase in digital payments using cards. If not for demonetisation, it says, the economy would have taken three more years to achieve the level of digitisation that it has since November.
  • It is unanimously agreed by experts that a cashless world offers many undeniable benefits. In a world where all, or at least most, transactions are digital, the government would be able to track any transaction. This would help prevent tax evasion, thus increasing tax revenue, and also help in dealing with criminal transactions.
  • What is ignored is the fact that when the government cracks down on a preferred method of transaction among citizens, the result is a net economic loss to the society. After all, it is not some superstition that holds back citizens from using digital cash. Instead, there are often some good economic reasons for them to choose to deal in cash over other forms of money.

Low-value transactions

  • For one, physical cash often offers the easiest and cheapest way to deal in many low-value transactions
    • It might, for instance, make no economic sense for small businesses to build the infrastructure required for digital payments, or for poor households to pay the price for it. Many businesses and consumers might automatically adopt digital technology as its costs drop. Forcing them to prematurely adopt technology will only be harmful to their interests.
  • Two, a broad brush has been used to paint all untaxed cash-based economic activity as a crime that needs to be punished, but it should be remembered that cash actually allows several beneficial economic transactions to thrive.
    • In the absence of cash, a lot of these useful activities would be crushed under the weight of harmful government policy. It is no coincidence that many legitimate economic activities get pushed into the underground economy only under draconian regimes.
  • Lastly, it is worth noting that the preference for cash among citizens has traditionally worked against the plans of governments to pursue inflationary policies.
  • Simply stated, if citizens are allowed to encash their deposits to escape a situation like negative interest rate policy (NIRP), it would threaten the stability of the banking system.
  • Cash thus acts as a natural check on inflationary government policies. It is no wonder that cash has been turned into an evil zombie, which it is clearly not.

A looming threat

  • About 5,500 of over 76,000 children tested in nine Indian cities have been diagnosed with tuberculosis, 9% of them with multi-drug resistant TB (MDR-TB), highlighting the silent spread of the disease.
  • According to a 2015 study, of the over 600 children who had tested positive for TB in four cities, about 10% showed resistance to Rifampicin, a first-line drug.
  • Very often, children who test positive for TB have been in close contact with adults with the disease in the same household. With up to a couple of months’ delay in diagnosing the disease being the norm, there is a continuing threat of TB spreading among household contacts and in the larger community.
  • Children below six years of age in the household of a newly diagnosed patient are required to be given the drug Isoniazid as a prophylactic even when they do not have the disease.
  • A proactive approach to testing helps in early and correct diagnosis of all contacts and in cutting the transmission chain.
  • Fixed-dose combination (FDC) drugs that take into account the revised dosages for children were finally made available in late 2015. The FDCs are meant for treating children with drug-susceptible TB and cannot be used to treat children who require second-line drugs or who have MDR-TB. After more than a year’s delay, a few months ago India finally introduced FDCs in six States.

When too much is too little

  • According to the Food and Agriculture Organisation (FAO), “One third of food produced for human consumption is lost or wasted globally, which amounts to about 1.3 billion tons per year.”
  • Food wastage has multiple socio-economic and environmental impacts. In a country like India, not only is food scarce for many poor families, it is a luxury for many others.
  • Though hunger cannot be tackled directly by preventing food wastage, a substantial amount of food that is wasted in our country can feed many hungry people.
  • India ranked 97th among 118 countries in the Global Hunger Index for 2016.
  • About 20 crore people go to bed hungry and 7,000 people die of hunger every day; wastage of food is not less than a social delinquency.
  • According to one estimate, 21 million tonnes of wheat are wasted in India every year. A recent study by the Indian Institute of Management, Calcutta, revealed that only 10% of food is covered by cold storage facilities in India. This, coupled with poor supply-chain management, results in significant wastage, both at pre- and post-harvest stages, of cereals, pulses, fruits and vegetables.
  • The wastage of food entails loss of considerable amount of resources in the form of inputs used during production. For example, 25% of fresh water and nearly 300 million barrels of oil used to produce food are ultimately wasted
  • The increasing wastage also results in land degradation by about 45%, mainly due to deforestation, unsustainable agricultural practices, and excessive groundwater extraction. Wastage results in national economic loss. To put a monetary value to the loss in terms of wastage, India loses Rs. 58,000 crore every year
  • The energy spent over wasted food results in 3.3 billion tonnes of carbon dioxide production every year. Decay also leads to harmful emission of other gases in the atmosphere; for instance, decaying of rice produces methane. Food waste emissions have a major impact on climate change and result in greater carbon footprint.

Laws to encourage donation

  • In India, there are many civil society, private sector and community initiatives aimed at distributing food among the poor.
  • The government is also committed to securing availability of food grains for two-thirds of the 1.3 billion population, under the National Food Security Act, 2013.
  • There are initiatives such as India Food Banking Network (IFBN), which is promoting the concept of collaborative consumption with support from the private sector and civil society organisations.
  • The government needs to do more and should play a larger facilitating role. The Prime Minister’s call to the nation needs to be followed up with further interventions.
  • There is an urgent need to understand the complexity of the problem and then to devise a national-level strategy to combat it so that surplus of food can be turned into an advantage instead of resulting in wastage.