New Delhi: Is it possible to imagine a world without pockets? Perhaps not right now! However, if achievable in near future, it surely would be no lesser than a huge daunting task. This infact is visible from the decision of banning Rs 500 and Rs 1000 currency notes by Narendra Modi government. While the move was thought to not only bring transparency into the banking system in India but also be a step towards cashless transactions. However, it at the same time has lacked effective implementation (perhaps due to short time and secrecy).
Anyways the strategy behind the decision had been well thought yet the complications resulting out of it have left the decision makers puzzled.
The various verticals of bioscience sector including healthcare, biotechnology and agriculture too have felt the effect of demonetization. While the transactions at hospitals were exempted from it for few days, eventually they too had to face the crunch. The digital payments are being encouraged in a big way at the hospitals. Similarly, the biotech and agriculture industries have experienced the increased cashless transactions in one way or the other.
Drug regulator goes digital
In its circular signed by the Drug Controller General of India, Dr G N Singh on December 13, 2016, the Central Drugs Standard Control Organization (CDSCO) wrote to all state drug controllers asking for progress on steps taken towards cashless transactions.
The government of India has taken series of steps as part of its Digital India initiative. In pursuance of this, the Ministry of Health and Family Welfare has been making efforts to leverage Information and Communication Technology for improving efficiency and effectiveness of the healthcare delivery in the country. One of the activities initiated for the purpose is to move to a cashless economy by adopting various methods of digital payment. On the regulatory side, CDSCO has already moved towards receipt of payments of licensing and processing fees etc. exclusively through digital non-cash means.
The letter addressed to state drug regulators further mentioned, “In the healthcare sector, we are currently taking steps to introduce cashless transactions. As part of this, it has been decided that we need to move towards digital payments in case of pharmacies and as you will agree, it is immediately doable. I would request that you all advise pharmacy shops, druggists, chemists and other players in supply chain to switch over to use of digital technology in their day to day affairs.”
The cash crunch resulted in introduction of new innovative ways of delivering healthcare. Leading drug and medical device makers found unique ways to sell the products to customers.
Biotech industry welcomes the move
Mr P M Murali, President, Association of Biotechnology Led Enterprises feels that the demonetization will have long term effects. “It reflects the government’s willingness to engage and take transformative steps which is equally needed in this industry,” he said while making a point at an event in Delhi.
In her immediate reaction, Dr Kiran Mazumdar Shaw, Chairperson and Managing Director, Biocon had tweeted, “Demonetization as a bold move which would allow us to leapfrog to a digital cashless world.” She later clarified in an interview with a leading daily that she is not saying it will be a zero cash economy but a less cash-dependent world.”
Healthcare marketing adopts novel moves
The cash crunch resulted in introduction of new innovative ways of delivering healthcare. Leading drug and medical device makers found unique ways to sell the products to customers. In January 2016, Mumbai-based drug maker Glenmark introduced easy monthly instalment (EMI) schemes on two of its cancer drugs, which treat prostrate and breast cancer. With the ongoing demonetisation drive, the company is offering two more top-selling cancer drugs under the EMI scheme and may extend it to other drugs too. The new products on offer under the EMI scheme are breast cancer drug Fulviglen and prostate cancer drug Procabazi.
Patients can opt to pay for these drugs within three, six and nine months. Moreover, the company claims they will pay the processing fee of 2.3% on credit card transactions. Another leading healthcare company, Medtronic, which manufactures medical devices is offering loans to the consumer. Patients can get a device by paying 15 percent of the cost. They can pay the rest through EMIs that start from ₹1,000 per month.
“The duration of loans varies from six months to three years. Moreover, the loan is disbursed within two to three days of getting sanctioned,” the Medtronic spokesperson was quoted in reports.
Govt takes steps to ensure cashless transactions in agriculture
Post demonetization, all the Chief Secretaries of the States and Commissioners of Agriculture were directed by the government to ensure that the farmers do not face any kind of difficulty in getting fertilizers. They were directed to ensure that all the Cooperative Societies, Private Wholesalers of fertilizers provide fertilizers to farmers through all modes of payments like on Credit as well as through Credit Card, Debit Card, Cheque etc.
The Minister of Chemicals and Fertilizers, Mr Ananth Kumar recently informed that strict instructions were given to all the fertilizer manufacturers and importers of fertilizers that it would be their primary responsibility to ensure that farmers do not face any problem under any condition in getting fertilizers and for this they have to ensure that all modes of payments are accepted by all concerned dealers, wholesalers or retailers. He further informed that Fertilizers Companies have been directed to see that in case any kind of problem is noticed anywhere in the country due to non-availability of cash or banking services, farmers should be provided fertilizers on credit basis and for that all necessary arrangements be made by them.
Government has taken several decisions to aid the farmers in the current Rabi season to facilitate farming activities and to support rural economy. NABARD has made available Rs 21,000 crores limit to the District Central Cooperative Banks (DCCBs) through State Cooperative Banks for Rabi agricultural operations which benefit more than 40 percent of the small and marginal farmers. Several measures like higher cash drawl limits for farmers and registered traders in APMC markets/mandis, extension of time limit for payment of crop insurance premium, purchase of seeds with old high denomination bank notes of Rs 500 from Government Centres, have been announced by Government for the benefit of the farmers.
Further, as a relief to small borrowers (i.e., loans upto Rs 1 crore), RBI has decided to provide additional 60 days’ time for repayment of dues. This will be applicable to personal and crop loans including housing and agricultural loans, taken from banks.
The demonetization reflects government’s willpower to change the status quo. Despite doubts and difficulties, the move has raised hopes of drastic steps in future too to correct the system. The ease of transactions is the major factor behind the transition but equally important is the transparency that comes as an icing on the cake. The cashless economy will only hasten the progress of an advanced technology manufacturing industry like that of bioscience. However, the implementation of demonetization has to be streamlined with immediate effect. With even government agencies promoting the digital transformation, it shouldn’t be an issue for companies to step up efforts towards achieving the same.