Impact Of A Cashless Economy On The 1.2 Billion Indians
The introduction of new 2000 and 500 notes came in as a shock and surprise to most people in the nation. Although the notion behind the introduction was supported but the practicality was critiqued. But one good aspect of all this was the push unto cashless economy that people have been talking about. ArunJaitley, the Finance minister of India, said “The note Ban is not merely nudge the economy in the direction of cashless economy but [give it] a significant push in that direction.” The general public were still digesting the whole note ban phenomenon when this new cashless idea came forth.
Basically a cashless economy means an economy that runs on digital cash which includes debit and credit cards, e-wallets, e-payments, and online transactions like NEFT, RTGS etc.
In a country like India, it seems very radical to change to a cashless economy as cash in its liquid form is used very widely. 85-90% of the economy runs on cash transactions and people seldom use the cashless way to deal in day to day life. The demonetization move actually made 85% of India’s cash null. Time had come for people to take a new carved way i.e. the cashless way.
Cashless economy has been laudedfor the reason that it will actually curb down the black money in the economy. Furthermore, these transactions leave a trial which can be used for taxation purpose. These new methods of transaction will provide universal banking services to all the people in the country making it easier to transact between far off places as well. 1 in 7 notes is supposed to be fake, which has a huge negative impact on economy, by going cashless, that can be avoided. The costs in online transaction seems to be the main concern for people to use their cards right now, but this will reduce immensely if the cashless action plan takes a full swing.
However, cashless economy has been criticised for various reasons. One of it being the fact that common people feel it is very complicated to deal everything online. Another reason is that internet and financial literacy might not be there among some people. India is dominated by small retailers. They don’t have enough resources to invest in electronic payment infrastructure. Another major fear that has risen is that of hackers who might take control of the banking system itself. So people are quite sceptic about this as well.
It has been 50 days that Mr. Modi asked for. And today we can see not much has changed except for the fact that even the vegetable vendor has a card machine to transact. So whether the country is going through an economic development or a degradation, this time will only tell.