On November 8, Indian Prime Minister Narendra Modi announced that India’s currency notes ₹500 and ₹1000, but there is no sufficient supply of new notes in order to circulate the money for regular Economical needs. Most of the people could barely manage their daily expenses. Due to Demonetization, millions of users adapted the digital payment systems.The Finance minister, in 2016 budget speech, talked about the idea of making India a Cashless society.. The RBI also stated in a document that “Payments and Settlement Systems in India: Vision 2018” a plan to encourage electronic payments and to enable India towards a cashless society.
What is Cashless India?
The Cashless India is one in which all the transactions are done using credit/debit cards, therefore reducing the usage of physical currency. In a fully cashless Economy even the small transactions like buying a ticket, vegetables is done through cards.
Benefits of Cashless Economy:
No corruption, No Black Money: Through cashless transactions, details of every transactions is maintained. Payments done by every individual can be easily traced.
No fake Money: One of biggest advantage would be totally eliminating fake currency.
Ensures Payment of taxes: As every single penny you own is counted, so it will be difficult to evade taxes.
Recently Government has also launched UPI which will make Electronic transaction much simpler and faster.
Government has also withdrawn surcharge, service charge on cards and digital payments.
Problems through Cashless Transactions:
- Though bank accounts have been opened through Jan Dhan Yojana, most of them are lying un operational. Unless people start operating bank accounts cashless economy is not possible.
- India’s economy is dominated by small retailers. These don’t have enough resources to adapt to Electronic payment.
- People finds it easy to pay using cash, instead of going for digital payment.
Currently, 98% of transactions are done by cash. Governments, aim is to reduce the percentage to 70%.