66% of Real Estate Transactions are still carried-out through cash; post demonetization.

The electronic transactions are on the rise Three years after Narendra Modi in a national address banned Rs 500 and Rs 1000 currency notes but many people still prefer cash transactions than digital transactions, according to a survey. The survey also revealed that following the demonetization of currency notes black money continues to dominate the real estate market.

As per the survey conducted, only 33% of the respondents said that they did not make any cash payment when questioned how much cash they paid while buying a property. They said they have made full amount by cheque or e-payment. All of the remaining 66% said they used cash for the past year to purchase a property. According to the survey conducted by Local Circles, a Community platform two-thirds of property transactions saw a cash element of 10% to 50%.

The survey said that a majority of Indians continue to make a significant share of their total annual purchases in cash. Around 40% of individual said that between 5% to 25% of their expenditure are done in cash, 29% said that they paid between 25% to 50% of their transaction in cash and 27% said that they paid cash for almost every product in last year. This, however, continues to improve compared to last year, according to the survey, as more people did a larger number of purchases in cash.

“An important objective of demonetization was that cash is used lesser for payments and that people be encouraged to pay using non-cash methods, but it seems that cash transaction is not reducing in the Indian economy,” the survey pointed out.

Even though nearly 75% of the respondents thought that demonetization had some advantages. “Three years after demonetization, people were asked what do they considered about demonetization top benefit. 21% said black money has been reduced and 12% said direct tax collection has improved. 42% said a large number of tax evaders were brought into the net and 25% said that demonetization had no advantage at all”, the survey said.

While asking about the negative effect of demonetization, 32% said that there is a loss of income for many unorganized sectors employees; 2% said it was a significant migration of workers to villages and low rural income. Around 33% said the economic slowdown is the greatest negative impact of demonetization while 28% did not feel any negative effect.