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An e-currency to plug currency leakage

PHOTO: Rohit Jain Paras

New gadget: Ashish Sharma with his innovation.

JAIPUR: A Jaipur-based chartered accountant has devised a new transaction system based on the novel concept of electronic currency for transfer of funds from the Centre to the districts under the National Rural Employment Guarantee Scheme (NREGS) with enough safeguards to control pilferage and prevent loss of money during payment of wages to labourers.

The brave new e-currency system can change the entire concept of financial transactions presently carried out through cash, cheque books and credit and debit cards and effectively address the pressing issues of economic recession, hyper-inflation and cash crunch, says Ashish Sharma, chartered accountant and writer on economic affairs.

Mr. Sharma, who has designed an electronic currency machine (ECM) for banking through digitisation of money, plans to promote it as a foolproof and secure system for instant money transfer. The electronic gadget with several features and keys for payments and receipts is set to make e-currency a legal tender replacing the physical paper currency.

In his pilot project formulated for NREGS, Mr. Sharma has suggested allotment of ECMs to each labourer and installation of computers with servers at the bank head office, which would maintain the unique code control register. The remuneration will be transferred in the digital form through bank branches to the labourers’ ECMs.

“All ECM transactions will be cleared and simultaneously updated in the records as well as the accounts through the head office server. The branches will feed the transaction code series in the ECMs for facilitating withdrawal or transfer of money by the NREGS workers,” Mr. Sharma told The Hindu here on Monday.

The 46-year-old chartered accountant affirmed that the e-currency model would eliminate the scope for corruption in the Centre’s flagship scheme providing employment to lakhs of people in villages across the country. “It will minimise the role of intermediaries and ensure that each rupee for wages and asset creation is accounted for,” he said.

Mr. Sharma, who intends to submit the draft pilot project to Union Rural Development Minister C. P. Joshi for his consideration, said even illiterate NREGS workers would be able to carry out transactions through ECMs of the size of a standard mobile phone, which would be equipped with speakers providing information in the local dialect on every stage of the operation.

While pointing out that the currency development should cope with the rapidly changing computerised world, Mr. Sharma said the e-currency system would generate a “systemic money” which would never exhaust due to its zero leakage from the economic system.

“Moreover, the money with the growing number of its rotations will go on multiplying ad infinitum creating real wealth, the value of which is at par with its face value,” said the chartered accountant who has been working on the concept for the past six years. Following the creation of real wealth, there would be no scope left for hyper-inflation and cash crunch, he added.

Since the e-currency will remain deposited with the bank and the individual consumer too will enjoy its liquidity simultaneously in the duality-in-pocket arrangement, the banks will not be required to keep any money reserves and the cash reserve ratio (CRR) will be zero. The never-ending rotation of money will augment the country’s economic growth, according to Mr. Sharma.

He said all kinds of economic offences, funding for terrorism and white-collar misdemeanour arising out of spurious money could be controlled by the introduction of the e-currency system. Eminent economists such as D. R. Mehta, V. S. Vyas, Mohammed Yunus and Rodney Shakespeare have evinced a keen interest in the new system.

Mr. Sharma has also authored a book, Has the time for electronic currency come?, advocating adoption of the brave new currency. The then Vice-President Bhairon Singh Shekhawat released the book here in June 2004.

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