The other states in the country are somehow managing to weather the demonetisation storm but not Telangana. Telangana CM K Chandrasekar Rao, in a race to better neighbouring Andhra Pradesh CM Chandrababu Naidu, supported demonetisation and says that if Telangana has to survive, they would have to go for  cashless transactions to increase the revenue.


Recently, Ibrahimpur was in the news for becoming the first cashless village in southern India. While more than 70 per cent of the residents were already bank account holders, the rest were provided with bank accounts and debit cards in the last two weeks.


KCR might be beaming at the achievement but the ground reality is different. According to a news report in this national newspaper, the state needs 10 lakh point of sale (PoS) machines at this point of time to go digital. But, Telangana only has 78,000 PoS machines at its disposal.


The condition in Telangana today is bad, so much so that at the onset of demonetisation, state finance minister Etela Rajender has said, “The Telangana government’s estimated revenue loss following the Centre’s demonetisation move is to the tune of ₹1,000 to ₹1,500 crore per month.” Stamps, registration, motor vehicle and commercial tax collections in particular have taken a huge hit.


Recently on payday, the streets of Telanagana were awash with angry crowds and voices of dissent were heard. Banks in the state were unable to furnish enough cash leaving salaried employees high and dry, even in the case of government employees, huge lines were witnessed in front of banks.


KCR is trying to play his cards safely because on one hand while he takes care not to antagonise Narendra Modi and has lauded the government for its announcement but has also meanwhile made it known to the government, how cash-strapped the state is and that they would require certain leeway in payment of taxes and loans.


Coming back to the PoS situation, according to Mohammed Ali Shabbir, Opposition leader in the Telangana Legislative Council as quoted by a news report, “Telangana has fewer banks and ATMs than Andhra — 5,212 bank branches and 10,000 ATMs. Hardly one tenth of banks and ATMs are in rural areas and Hyderabad accounts for 90 percent of branches and ATMs.” If this is the ground reality then Telangana’s cashless dreams will be suffering greatly.


The PoS machines are supposed to given from the banks. The banks  generally charge a fee from those using these machines but that has been lifted in the wake of demonetisation. In fact, the banks themselves are not equipped to deal with the digital India initiative. Public and private sector banks have just placed orders with external agencies for the procurement of these card-swiping machines and needless to say in Telangana the order will be staggering. So how is the state expected to work with 78,000 cash terminals only?


And even with that, merchants are complaining of bad network connectivity and defunct PoS machines. So this is proving to be huge hurdle for customers as well and for small traders and businessmen, this loss in business will be difficult to bear.