Cashless India a Boon or Bane

Cashless India a Boon or Bane

Recently, one of the guest lectures at the University sparked a discussion on an interesting topic, Digital India Program which was launched on November 8th 2016. One year since the launch different political parties are Commemorating the occasion in its own stride. A reality check that if this policy launched by the Prime Minister is really a Boon or a Bane is important for the young minds to understand.

The Digital India program was launched as the Flagship program of the current ruling party with a pursuit to transform India into a digitally empowered society. Different Digital Payment methods were introduced across the country such as BANK CARDS, Unstructured Supplement Service Data(USSD) –‘MOBILE’ BASED BANKING (*99# banking), AADHAR Enabled Payments System(AEPS), E-Wallets and Unified Payment Interface (UPI), Electronic Clearing, Immediate Payment Service (IMPS), Real Time Gross Settlement ( RTGS) and National Electronic Funds Transfer ( NEFT).

“Faceless, Paperless, Cashless” is said to be one of the professed role of Digital India. The avowed belief of the Government of India is that these steps will empower the society and build the economy of the country. “Faceless, Paperless, Cashless”, there have been for and against debates on this very statement.

But the Question is Do we really need to transform?

There are many benefits associated with this Transition, it reduces the cost of printing and distribution of cash as digital transaction sees it all as virtual transactions, the very purpose for which the government claims to achieve is to straggle the grey economy , increase tax compliance and the reduce the Risk of carrying cash.

The boon of this system has been progressively increasing the online transactions for Payments processing Banks and Companies by about three times more to what they were before Demonetization. The Government is able to see a healthy growth of more than 20percent on a month on month basis in transactions on online payment gateway like Debit, Credit Cards, Net Banking, Mobile Banking, E-wallets, Point-of-Sales, Coupons, Pre-paid cards etc. Credit, Debit cards and such other forms also called as “Plastic Money”. Highly ethical change has been the curb on black money and illegal transactions of money.

The biggest bane of the cashless economy is that not everybody has the knowledge of doing digital transactions and hence its reach is limited to urban and semi-urban centers only and therefore it is very difficult to implement cashless economy in a big country like India where many sections of the society in rural areas are illiterate and poor. Hence the lack of proper infrastructure and education among citizens is disadvantageous as far as the cashless economy is concerned. Another disadvantage is the exposure to cyber fraud and hacking of bank accounts. Another demerit of the cashless economy is that digital mode of payments like the credit card, wallet payments, internet banking involves some transactions fee which is not the case with cash transactions and hence any individual thinking of doing online transactions will take into account these transaction costs and will not favor online medium of transactions.

In this conflicting scenario between the boon and the bane of the cashless India, it is required that the Indian Government analyses the cashless economy model, the merits and demerits of the scheme and then bring in policies to suit the Rural and Urban India. Cashless economy will take its time, it cannot be imposed on the people rather it can be gradually adopted by the people of the country.


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