Bill Gates makes a U-turn on demonetisation

We are certainly for digitisation. I do not have opinion about demonetisation. I still don't, says Bill Gates

A day after calling the demonetisation of Rs 1,000 and Rs 5,00 notes as an “important step to move away from a shadow economy” and a “bold move”, Bill Gates did a U-turn on Thursday and said, “I have no opinion about demonetisation”. He avoided commenting on the government’s move despite repeated queries even as he put his full weight behind the growing digital economy.
 
On Wednesday, the founder of Microsoft and now the co-chair and trustee of the Bill and Melinda Gates Foundation at a public lecture, hosted by NITI Aayog, had said: “The bold move to demonetise high-value denominations and replace them with new notes with higher security features is an important step to move away from a shadow economy to an even more transparent economy. And digital transactions really, I think, will rise dramatically here.”

 
But on Thursday, speaking to a select group of journalists, Gates avoided making a comment on demonetisation one way or the other.
 

One of the journalists asked: “We saw today morning some comments in the newspaper that you supported Modi’s position on demonetisation. Do you think making people stand in queues to access their money is good governance?”
 
He replied, “I had nothing to do (with it), I had no advanced notice, no involvement. Nobody asked my opinion.”  When asked yet again to clarify on his statements on Wednesday, he said, “I already answered that. Nobody consulted us before or after. All I knew is that a few days before, I read about demonetisation in newspapers. When I was at the airport, there was a long queue. Someone pointed to it and said that is demonetisation. I do know that independent of demonetisation, digitisation is a good thing.”

 
“We are certainly for digitisation. I do not have opinion about demonetisation. I still don’t...You know what it is, better than I do,” he added. 
 
“If you want Rs 50 transactions to happen on less than two per cent overhead, be able to send money to your relatives at a distance, sell your crops and save a certain amount for the next season, the digital platforms will let us to do great financial services for the poor people in a way that the non-digital system will not let you do,” he said.
 
He noted the digital economy, running on payments banks, mobiles and other forms would be more cost-efficient than micro financing, which had provided modest benefits but not as dramatic as people had expected.

 
“As you digitise those things, the interest rates,  the transaction rates go down and the ability to make savings go up. So, we have been dealing with the government with payments banks. Those we think will be activated very soon.”  
 
He also extolled the virtues of digitisation for delivering health benefits to people. He gave the example of the Foundation’s efforts to eradicate polio in Nigeria. Gates noted that GPS-based tracking had helped the polio teams reach the right villages and only through that the country had been able to come close to eradicating polio in the country.

 
On how cashless a society could turn through digital transactions he said, “It is very modal. There are countries where cheques have reached a critical mass and countries where cheques are a joke. In Nordic countries, there is very little cash today because their debit cards have very little fee. Those debit cards are now moving on to cellphones.”

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