Implementing a cashless economy for India
India is espousing a cashless economy step by step by turning towards a less-cash society. But this move was not a hot cake. It is certified in demonetization. And announced on November 8th2016, wherein withdrew 86% of extending currency from circulation to resist the imperil of a cash-driven economy.
A cashless society An economy in which just a tiny quantity of money is utilized in transactions is known as a micro-economy. Transactions performed using “credit cards, debit cards, wallets, or digital modalities” establish economic growth.
According to the Forex Bonuses 2017 report, Canada and Sweden are likely to transition to a cashless economy.
India is a cash-driven economy
People in India prefer to pay with cash rather than credit cards. So we should adopt the term “less-cash economy,” which refers to a period of cultural and economic transition in the absence of currency.
The government is promoting a Cashless world by BHIM app, AEPS, Digital, etc. A cashless economy involves vigorous digitalization. It contains some challenges. It is pleasant for industries like UBER and OLA to escape people’s attitudes, poor transaction security mechanisms, insufficient facilities, etc. Moreover, they would analyze secondary data.
India can move toward a cashless world; platforms such as PayTM are accessed easily. Good quality internet and good infrastructure of payment are provided. But for the Indian nation, it is difficult to accept the cashless economy.
In a cashless society, the economy is, without a doubt, the ideal item for any economy. However, the Indian government should invest more money in expanding Internet access in rural regions. These internet restrictions increase the hurdles in progressing a cashless economy. New laws are needed strictly to improve cybersecurity in the country. Must assure Continuous supply of power to banks.
The only economy that affects the unceremonial sector and transforms itself into a formal sector. And can avoid outgo for the manufacture of currency notes. A cashless economy will build a lot of employment opportunities in banking and the software industry.
Hurdles in Making India Cashless Economy:
The main hurdle in making India cashless is less knowledge about cashless transactions. These transactions are done via the internet among the masses.
India is facing hurdles in setting up a cashless economy. Such as lack of digital and banking infrastructure. Some other fundamental problems are the shortage of infrastructures like power supply, internet, and smartphones.
Lack of cybersecurity, financial literacy, high cash dependency, etc., is also the main hurdles in making India cashless. In his speech on the 2016 budget. The finance minister stated that India should become a cashless society.
Going cashless not only makes life easier but also helps to legitimize transactions. It aids in the prevention of corruption and the flow of illicit funds. After that, it boosts economic growth. The cost of printing and transporting currency notes has been cut.
The drop in production costs connected with paper money and a decrease in corruption, tax fraud, and the shadow economy that works alongside India’s official economy are two significant, predictable benefits for both the people and the government of India. To begin with, maintaining a cash economy is costly. To print the currency, the Reserve Bank of India has spent about 32.1 billion rupees.
“The direct cost to maintain a cash-based economy in India is close to 0.25 percent of GDP” (The Hindu). The second advantage is that the shadow economy, which is prevalent in India, is discouraged. Cash is difficult to track. The unexplained financial flow is used to fund criminal activity such as corruption and terrorism. It would make it more challenging to engage in these illegal activities now that the cash flow has been reduced.