Dear Editor,
With the New Year spirit entering our doorstep to welcome 2017 in our lives, India still continues to be driven by the use of cash, with only 5 per cent of all payments happening electronically. PM Modi’s vision talks about the idea of making India a cashless society, with the aim of curbing the flow of black money, where, ‘black money’ is the layman term for a vast network of off-the-book cash transactions and unbanked savings. But the problem doesn’t end here; with various other hurdles in the way, India still needs some time to emerge as a cashless economy.
India’s demonetisation scheme was a unilateral initiative that was planned in secret. The strategy was to instantly nullify all 500 and 1,000 rupee banknotes, the most common currency denominations in the country, and then eventually replace them with newly designed, more secure 500 and 2,000 rupee notes. It also pushed millions of new users onto the country’s digital economic grid by virtual fiat. As the demonetisation process continues, PM’s rhetoric is less about fighting corruption and more about transitioning India to a cashless economy.
Digitisation is the process to create a way for all purchases to be tracked and recorded, which can further work towards limiting the effectiveness of the black market as well as stemming the flow of capital that’s destined to fund terrorist activities. India hopes to create a cleaner, more transparent economy via digitisation that will lead to an improved climate for foreign investment. Digitisation has impacted every Indian in a peculiar way and they are voicing their opinions about it such as:
More retail outlets are accepting e-wallets; rickshaw drivers in Mumbai are accepting payment through mobile wallets and mobile banking etc. India still culturally believes in cash and a paradigm shift in thinking will need time and resources. But with the change in Indian economy certain new digital payment methods like banking card, mobile wallet, micro ATM, Internet banking etc. have come into play. With all these small steps India is moving forward towards a complete cashless economy.
But still some efforts should be made to convert urban areas as cashless areas, as 70 per cent of India’s GDP comes from urban areas. If government can convert that into cashless it will be a huge gain. But the story doesn’t end here for 70 per cent of India’s population resides in the rural areas and a much needed attention is required on the part of Govt of India for making rural India cashless. Therefore different trajectories need to be planned for migration to cashless for those having bank accounts and for those not having. This will symbolise a new leap in this transition.
Sarvagya Khajuria
Udhampur