Nothing loomed larger in the public imagination during the first months of demonetisation than the long queues in front of banks and ATMs.
That public has hit back. According to the latest RBI figures, in February, cash-guzzling Indians silently used their debit cards to withdraw more money (Rs 1,928 billion) than what the same fuming, fretting millions withdrew (around Rs 1,750 billion) during the first burst of demonetisation.
This points to just one thing: cash is still king. In February, around 22 lakh point of sale (POS) terminals swiped just 4.04 debit cards on an average per day. During demonetisation, the figure was more than double. "There is a steep decline in card usage; more and more people feel comfortable going back to cash," says James Wilson, the Kerala civil engineer who became famous for his analysis of RBI data on cash availability and effects of demonetisation. Of the 839.98 million debit cards in circulation, only 30 per cent are in use - meaning 97 per cent of retail transactions are in cash, he adds.
What about the Prime Minister's dream of "cashless India"? "For now, it's a utopian dream," Wilson says.
He is not alone in reading the picture as this. "Most indications are that more or less we will be back to our original levels of 78 per cent of transactions taking place in cash and the rest in digital," says Debashis Panigrahi of IMAP, a global advisory firm.
The latest figures say the RBI has remonetised around 73 per cent of the money that was sucked out. The printing presses are set to print more. "People are hungry for more cash. That's why you see so many ATMs running dry," Wilson says.
Economist R. Kavita Rao of the Delhi-based National Institute of Public Finance and Policy says that the huge demand for cash after demonetisation "suggests that the change to cashless modes still has a fair distance to cover." Transforming an economy from cash-based to cashless or even "less-cash" economy is a "process" that will happen over time. The "process" has been on for many years. For instance, the total cash transactions in 2005 accounted for about 95 per cent which reduced to 89 per cent in 2010 and 78 per cent in 2015.
Several mobile-based payment systems such as BHIM and DigiDhan Abhiyan were introduced after demonetisation. Transactions on apps like BHIM have gone up substantially and so has been the case with Internet banking and Immediate Payment Service. But these, some say, could have happened even without demonetisation.
"Demonetisation, by providing a shock to the system, would have induced a segment of the population to move to digital transactions permanently while another segment would have shifted temporarily and would return to cash when the cash availability improves," Rao says.
Some things, however, may have changed for the better. "Demonetisation has definitely resulted in a mindset change towards digital transactions," says Sreedhar Prasad, partner, Internet business, e-commerce and start-ups, KPMG India.
Mobile wallet company Paytm says that it has over 200 million users including around 50 million new ones. But Paytm did not reveal the latest figures or the possible impact on it as more and more people have moved back to cash.
Global payment firms also agree that demonetisation may have hastened the process of Indians feeling more comfortable with cashless options. "Our estimates suggest there has been a 127 per cent increase in merchant locations accepting card payments on a daily basis (debit and credit, POS only)," says Porush Singh, India and division president, South Asia, MasterCard. Singh also observes that people are making more low value purchases with debit and credit cards.
These are but small drops in the ocean, argues Wilson. "I am ready to stick my neck out and say that the RBI will print more currency in the coming months than it had sucked out as India is a growing economy and people will need more cash in hand."
The government has, on several occasions, said that demonetisation seeks to create a "new normal". Is more cash the "new normal" in a "cashless India"?