India is a country where in the people carry more of physical currency or hard cash in their wallets for their day to day transactions.India is a cash centric economy. With demonetization , all the 500 and 1000 rupees banknotes were instantly nullified, which was the most common currency denominations in the country. Demonetisation was brought about to catch the black market off guard and was planned to make India a corruption free country.What began as a sure fire surgical strike on Black money took a unprecedented turn towards making India a Cashless Economy.A cashless economy is one in which all transactions are done through credit or debit cards or by any other digital means.Because of demonetization 86% of India’s currency was removed from circulation, and the new notes supply was not adequate to take their place. Banks also were not notified earlier and with strict exchange limits banks did not have enough newly designed 2000 rupee notes to distribute to the people. People were left in choas as government banned 500 and 1000 rupees notes without providing the newly printed ones. Because of this cash crunch , millions of Indians had no clue how to buy the things they wanted and needed, business had no mechanism for recieving payment to their goods, to buy supplies or pay their staff. Demonetization did something surprisingly, it made many people to pay and receive through digital means. This led to the transition of India to a cashless economy.
Until this campaign, India was mainly cash – centric economy. 95% of the transactions was through cash. 90% of the vendors didn’t have card readers to accept electronic payments. 85% of the workers were paid in cash. With demonetization, there was a scarce of the new notes availability and people started switching to making online payments.Even the fruits and vegatable vendors opened their Paytm accounts so that buyers could scan their bar code to make a payment. A lot of retail shops started accepting e-wallets also. It become a question of survival of the fittest. The sooner you go digital the better , otherwise you are sure to perish. Since demonetization , Paytm reported a 3 times surge in new users taking the toll to 14 million new accounts in November alone. While Oxigen wallet daily average users increased by 167%. There was an exponential spike in both app downloads and merchant registrations.Even the vegetable vendors, Kirana shops, street vendors, auto rickshaws and taxi drivers started using e-wallet for their payment services. Thus India started slowly getting propelled to move towards a cashless economy.
With the digital payments, its easy and transperant to track the flow of money, and paying taxes also will become more transparent now. Everyone will come under the scanner window now. As of now only 1% of the total Indian population is paying income tax .A nation of over 125 crore had only 3.65 crore individuals filling their tax returns in the year 2014-2015. Out of the 3.65 crore individuals , there were only 5.5 lakh people who paid income tax of more than 5 lakh and accounted to 57% of the total tax. To get more people under the tax net, the government should make many tax reforms, the cashless economy has also come to the government’s rescue. It will track and keep record of the income of individuals and organizations under scrutiny.
It will definetly take time for India to be termed as a cashless economy, there are many challenges on the way. India has just taken a first step towards cash free economy, and the entire journey still has to be moved on . Even though there is an increase in the number of people making online payments, there are still many others who still do not have a bank account itself. Also in many rural places there is no internet connectivity and the people over there are not educated how to operate the mobile network , So its definetly going to take some time when India can be termed a fully cash less economy.
In order to achieve cashless economy, our government has to provide internet facilities in rural villages also and should provide education to our people on mobile networking. Also the government should bring about cyber security measures in order to protect from cyber attacks. If these steps are taken by the government then the day is not far when India will be showered with the coveted title of ‘Digital India’ or ‘Cashless Economy’.
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