7 Years of Note Ban: Cash Still Being Used to Buy Land, Property, Household Items & Services: Survey

In the last seven years of demonetisation, UPI (Unified Payments Interface) has transformed how Indians pay for products and services but large cash payments were still made for to buy property or land.

The survey conducted by LocalCircles shows 15% had to pay over 50% cash to buy a property, land or office; 18% indicated that the cash component was 30-50%; 28% had to pay a lower component of 10-30% and 15% of respondents indicated 0-10%. However, 24% of the respondents were able to complete the transaction without paying any part in cash.

The data shows 76% of those who bought a property in the last seven years had to pay a component of the price in cash; 15% paid over half the amount in cash.

The trend points to cash component in property transactions rising once again with only 24% indicating not paying money as against 30% two years ago.

The survey also sought to find out how many families are still using cash to make purchases. Out of 11,189 citizens, only 15% indicated that they don’t do cash transactions and 3% of the respondents opted for “can’t say”. Around 56% said 5-25% of their household purchases were in cash and without a receipt; while 18% shared 25-50% of their purchases on average were in cash and without a receipt; and 8% indicated 50-100% of the items they buy were on cash without a receipt. As the data shows 26% of consumers surveyed indicated that over 25% of their average household purchases were in cash and without a receipt.

Another category of those who used to use cash for 50-100% of their household purchases has dipped from 15% in 2021 to 8% this year. However, those spending 25-50% in cash without receipt has increased from 15% in 2021 to 18% in 2023. There is no change in the percentage of consumers making cash purchases for 5-25% of their household purchases.

When asked for which categories of products have you spent/ paid a sizable portion in cash? 59% of the respondents indicated groceries, eating out and food delivery; 7% indicated for buying long-term assets or property, jewellery, used vehicles; 4% indicated buying gadgets; 7% mentioned “other” purchases not listed above and 4% gave no clear response.

Many still use cash for services like haircut, paying salary to domestic help or home repair contractor. When asked for which category they made the payment without taking the receipt, 34% indicated salaries of domestic staff and personal services and home repairs, 18% also included travel while 6% indicated “others” not listed above.

While UPI and other digital payment mechanisms have reduced number of cash transactions, cash in circulation in the economy has only increased from 17 lakh crore in November 2016 to 33 lakh crore in October 2023.

The survey received over 44,000 responses from citizens located in 363 districts of India. 67% respondents were men while 33% respondents were women. 44% respondents were from tier 1, 32% from tier 2 and 24% respondents were from tier 3, 4 and rural districts.