Cashless Economy – a boon or bane?

Cashless Economy – a boon or bane?

“Learn how does a digital economy work! Learn to make transactions through cards, internet banking and various other electronic modes. Its CLEAN! “

Days after the demonetisation of lately used high-denomination notes, Prime Minister Narendra Modi was heard pitching about his policy of internet-driven cashless economy in his ‘Mann Ki Baat’ address. Analogous to which the Finance Minister Arun Jaitley, on Thursday, announced incentives

Retail Electronic Payments in India

Retail Electronic Payments in India

ranging from 0.75 to 10% aiming to entice the people. These incentives include rebates on petrol and diesel, policies provided by state insurance companies, seasonal railway tickets etc.

From black money and corruption to counterfeit money to a cashless economy, the BJP government has been constantly shifting the narrative of demonetisation. A ‘cashless economy’, however, would definitely scotch the possibilities of unclean transactions as a record of economic payments through electronic modes will be maintained.

What is a cashless economy?
A cashless economy is a situation in which the flow of cash Unified Payment Interfacewithin an economy doesn’t actually exist and all the transactions take place digitally through internet banking, debit and credit cards and apps like paytm, freecharge etc.

What are the advantages of having a ‘cashless economy’?

  • The flow of money will be more efficient as it will be transferred directly into the accounts the recipients.
  • A ‘cashless economy’ will scrape the possibilities of the sustainment of black market and underground economy.
  • It will provide no motive for an illegal accumulation of money in tangible form.
  • No risk of carrying currency notes in wallet.
  • A record of all the transactions will be maintained, thus making the system more transparent.

Advantages and Disadvantages

Is the shift to a ‘cashless economy’ a cakewalk for the government?

The answer is an obvious NO. With a literacy level of 74.04%, India is likely to face the obvious hurdles on its way to achieve a total digitalisation of its transactions. Moreover, a considerable fraction of the literate lot is also unfamiliar with the usage of internet and smartphones .Not every shopkeeper

There are many Challenges ahead

There are many Challenges ahead

is capable of affording a swipe machines as it has additional charges. India has a low internet penetration and a lower smartphone penetration, a disruption in internet connectivity adds to the hurdles.

There are cases where the government had itself caused these disruptions. Since 2014, there have been 39 internet blackouts. The reasons of these disruptions being protests, communal violence and other anticipated clashes in various states. A major portion of the total disruptions took place in Jammu and Kashmir because of the unrest that followed the killing of Burhan Wani, the commander of Hizbul Mujahedeen. In fact, the prepaid internet connections still remain suspended there.

‘To what extent is the government itself an obstacle to its cashless economy policy?’, is the question that pops up now. The answer to which is unknown.  As of yet, the reasons causing mishaps in internet connections are legion. The consequences, however, can be disastrous. Bad internet connectivity can put high-priority transactions out of gear. The initiative undoubtedly aims for a more pious system. The process, however, is likely to escalate the sufferings of the not-so-acquainted-with-internet citizens, who queue up daily in front of ATMs and banks after the November 8 event.

-Nivedita Chandra

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