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From today all State Bank of India account holders will have to keep a minimum amount of cash in their accounts or else will have to pay a penalty. Many small account holders – daily wage earners who normally never have more than Rs 500-600 in their accounts – are already considering withdrawing whatever little cash they have in the banks and close their accounts.

For the present, they can still withdraw their money and close their accounts because cash is still available with the banks. But when India goes cashless, they will no longer have such an option. If there is no cash in the banks, what will they withdraw?

There are people, who already do not have such an option. Money from different schemes now goes directly to their accounts. If they close their accounts, they will stop receiving money.

SBI’s decision to penalize account holders for not having a minimum balance in their accounts is perhaps the first initial indication of how people will lose their economic freedom in a future cashless society and how economic totalitarianism is spreading its wings in India. SBI’s footsteps will soon be followed by other banks.

The next step to further enslave the society could well be introduction of negative interest rates in which you will not earn interest. Instead, you will have to pay interest to the bank for keeping your hard earned money. Already in Sweden, the central Riksbank has set an interest rate of -0.5 percent for deposits. In Japan, the central bank has imposed negative rates.

In a negative interest rate regime, people’s life savings will be eaten away yearly with negative rates.  And in a cashless society one will have no other option but to park their money in banks.

Also in a cashless society, bank transactions will mostly be done online. At any hint of a protest, provocation or even anticipated provocation, the government will be able to block internet. After the killing of Hizbul Mujahideen commander Burhan Wani in Kashmir, the government blocked internet connection for over three months. During the Jat quota agitation, Haryana Government suspended the internet for 10 days in several districts. In the last 3 years there were 39 forced internet blackouts across 12 states for almost 250 days.

The government is telling us over and over again that there is no alternative to going cashless. There is relentless propaganda that usage of currency is primitive, not in tune with the modern world and so will be redundant in future.

The real story is that every digital transaction is a boon for companies like Visa, PayPal, MasterCard etc. It is not without reason that Visa campaigns: “Cash free and Proud” while PayPal shouts: “New money isn’t paper, its progress.”

“Cash I think in ten years time probably won’t (exist). There is no need for it, it is terribly inefficient and expensive,” John Cryan, chief executive of Deutsche Bank, said during a discussion on financial technology, known as “fintech”.”

In a world without cash, every payment you make will be traceable. Do you want governments, banks or payment processors to have potential access to that information? The power this would hand them is enormous and the potential scope for Orwellian levels of surveillance is terrifying.

Also, in a society where all financial transactions are recorded, all of your payment and credit history becomes an easy target for cyber-theft and improper snooping by government agencies.

Aadhaar Card and Totalitarianism

If cashless digital economy is one of the tentacles of the emerging economic totalitarianism, slow but certain introduction of Adhaar card (in arrogant disregard for the Supreme Court of India’s objections) in all aspects of life is its other tentacle.

In future, without an Aadhaar card you will not be able to register your marriage, admit your children to schools and colleges, get an LPG connection, open a bank account, purchase a train or plane ticket, buy a house or even get your salary.

As in case of digital transaction, at any hint of a protest, provocation or even anticipated provocation, the government will be able to bloc your Aadhaar card and bring you life, your very survival, to a halt. Remember that without an Aadhaar card, you won’t be able to go even to the courts in future.

Introduced by the Congress-led UPA government and now being aggressively pushed by the BJP-led NDA, the Unique Identification Authority of India (UIDAI) requires biometric information of every citizen, which will be incorporated in the Aadhaar card. The biometric information include: (1) facial photographs of the individual; (2) all 10 fingerprints; and (3) a scan of both irises. These will be stored in a vast data bank of the UIDAI.

Interestingly, the biometrics are initially stored and collected in private hands before it is transmitted to the UIDAI Central ID Repository. The loose framework linking UIDAI to the collection of biometric data is through MOUs with state governments or departments known as registrars. It is these registrars who engage private sector enrolment agencies like Accenture, Mahindra Satyam & Morpho  and L1-identity Solutions etc.

The Aadhaar verification system works through the internet. The service provider – say a bank or LPG cylinder supplier – reads your finger print on a small device. The biometric identification is confirmed against the data stored by the UIDAI in its central depository.

The Aadhar project was initially sold to the public based on the claim that enrolment was “voluntary”. The government and the UIDAI, however, are working overtime to create a practical compulsion to enroll and Aadhar is being made mandatory in increasing number of facilities and services.

Most of the Aadhaar-enabled databases will be accessible to the government. It will be child’s play for intelligence agencies to track anyone and everyone — where we live, when we move, which events we attend, whom we marry or meet or talk to on the phone. No other country, and certainly no democratic country, has ever held its own citizens hostage to such a powerful infrastructure of surveillance. Mass surveillance threatens to halt the historic expansion of civil liberties and personal freedom.

Jean Dreze observes: “For centuries, ordinary people have lived under the tyranny of oppressive governments. Compulsion, arrests, executions, torture were the accepted means of ensuring their submission to authority. It took long and harsh struggles to win the freedoms that we enjoy and take for granted today — the freedom to move about as we wish, associate with whoever we like, speak up without fear. No doubt these freedoms are still elusive for large sections of the populations, especially Dalits and those who live under the boot of the security forces. The Aadhaar Bill asks us to forget these historic struggles and repose our faith in the benevolence of the government…Only an innocent, however, would fail to anticipate Aadhaar being used as a tool of mass surveillance.”

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