Monday, July 09, 2007

ATM withdrawals outnumber credit card spend

Surprised at this report? I wouldn't be.

There has been a recent talk on how the credit card lifestyle is a drag on the Indian economy and how it is the ruin of the new generation. But, very clearly, that is some infinitesimal percentage. But this report is not really about that.

Cash withdrawals are more than credit card spends. Why? Simple. The economy runs on cash. Daily purchases, maids, vegetables, restaurants, medicines, groceries, movie tickets (Sivaji, included) are all purchased on cash.

Cash = no receipts. Many doctors/establishments charge you more if you ask them for a bill (bet those who wrote the report did not know this). Insist on a bill and the first thing they say is that they will add VAT (it is mostly "VAT"ever they feel like) of 12%. So, for getting your legitimate bill, you have to pay "their share of VAT." Restaurants - how many times do you take a bill from a restaurant? And the payment is in cash anyway.

And there in lies a tale, a tale that this blog has been talking about over the past few weeks. The cash economy - the economy which does not exist. And for this economy, we have to take money out of our bank accounts and pay in cash from which point the trail simply goes cold, for the taxman.

1 comment:

Neon said...

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