A journey to cashless economy - Digital India

On 08-11-2016, 8 PM, a very bold step was taken by our Honourable Prime minister by way of Demonetization to break the grip of corruption and black money and to avoid the corruption in our Great country India. As per the order the old 500 and 1000 rupee currency are no longer valid as legal tender from midnight of 8th Nov, 2016.

To minimize the difficulties of citizens, several steps are being taken. It is a step:

• To implement transparency in our system ,
• To make Corruption free India and
• To remove fake currencies

By making India Cash less Economy as part of Digital India Movement.

Let’s have a look at Benefits, Risk and Other areas of cash less economy - Digital India.

Benefit of Cashless Economy:

• Increase the number of smart phone users in India and internet users in India.
• Increase in number of bank account.
• Increase in number of bank all over India due to increase in bank transaction.
• No need to take physical cash; from anywhere u can do the online transaction.
• Increase in business of Financial Technology Firms and Mobile Payment Company for e-Payment, e-wallet.
• Increase in Bank account balance in saving and Current Account and Fixed Deposit Account.
• Transparency in System and Less Corruption.
• Reduction of cost of printing physical cash.
• Reduction of fake currencies in market.
• Boost in Economy.

Risk:

• Threat to IT or Cyber Security.
• Online Fraud.

This demonetization is part of larger agenda to move India into a digital economy. It is a push to go for digital transaction. However do the preconditions for a successful transition to Digital Economy exist? There are some other measures to be taken care in India to make the India successful in addition to the Digital Economy. Let’s have a look to the below:

• Whether all the family has their own House to stay with their family?
• Whether we have enough Govt School to provide basic education to Rural and Urban people?
• Whether we have enough Govt Hospital to provide basic medical facilities?
• Do we have enough literacy rate in India ( As per Census 2011, 73% people are literate--http://www.censusindia.gov.in/2011census/)
• Whether all people are getting enough work and earn wages to have normal life. (29.5% of the India population lives below the poverty line as defined by the Rangarajan committee as per the report submitted to Government of India in July, 2014. For more details those spending over Rs 32 a day in rural areas and Rs 47 in towns and cities should not be considered poor. )
• Are we sound enough financially to go for cash less transaction?
• Whether all the people are having PAN, Aadhaar, and Voter Id?
• Whether all the households are having Electricity Connection?
• Whether all the people are having smart phone or normal phone to do the digital transaction?
• Whether all the peoples using mobile phone are having Internet connection?
• Whether all the areas are coming under mobile network coverage and with high speedy Internet coverage to do the e-banking transaction (Merely 26% of Indian Population has internet access in 2015- Source- https://www.statista.com/topics/2157/internet-usage-in-india/)?
• Whether all the people are having enough skills and confidence to make electronic Transaction?
• Do we have infrastructure in Public Transport and Private Transport to issue ticket by accepting payment through electronic payment?
• Is there proper infrastructure in all the Train Station and Platform to issue ticket by accepting electronic payment?
• Whether all the Schools are ready to take the education fee by electronic payment?
• Whether all small vendor, shop keepers are ready to do cash less transaction?
• Are we ready with the security control measures to assure Common public that their hard earned money is safe in bank and they can use any time? Do we have proper security control to do digital transaction by using the mobile wallet, internet banking? (Two months before there were huge security breaches in debit card in India). Are we sure that our mobile transactions are secure?
• Are we aware the benefits and advantages of digital transactions?
• Do we have enough financial literacy program to go for cashless economy?
• Do we have enough Banking Service?
• Do we have enough bank and ATM machine?
• Do we have bank account for each house hold? ( including ‘Jan Dhan’ accounts, under the Pradhan Mantri Jan-Dhan Yojana (PMJDY) )

If answers to the above questions are satisfactory, then it will be easy to make cashless economy / digital India faster. Else we need to take proper steps and quick action in both Urban and Rural areas.

As per the census, 2011, 68.8% people stays in rural areas while only 31.2% people stays in urban area. (Source-http://www.censusindia.gov.in/2011census/)

Cashless Economy is not an easy task in a nation where cash is king.

However, Government has taken various initiative to promote Digital and cashless economy which is a very welcome steps for common people.

Finance Minister Arun Jaitley made 11 key announcements / Incentives on 8th Nov 2016 to promote Digital and Cashless Economy.

Hope the initiative taken by the Government for the Cashless Economy, Digital India, and Corruption free India will succeed in near future.