India is heading towards a cashless economy. A cashless society describes an economic transaction not conducted with money rather through the transfer of digital information usually an electronic representation of money in form of debit or credit card.
Cashless India is a mission launched by govt of India led by PM Modi to reduce the dependency of Indian economy on cash and to bring hoards of stashed black money lying unused into the banking system. It is a recently introduced phenomenon targeted to bring the sea change in countries monetary dealings.
Cashless India is coined after the union govt went ahead with its plan to demonetize currency note of Rs 500 and Rs 1000. Country embarks upon this transition to a cashless economy by this move. It was really a bold move considering the fact that in India people are more reliant on cash than in other countries of the world. Initially, it led to severe criticism as people faced more difficulties in dealing with this cash crunch. But eventually, the move has turned out to be a push toward cashless India that is bound to pave the way for a cashless economy, marked by greater transparency ease and convenience in monetary transactions. India is gradually transitioning from cash-centric to cashless economy.
In a cashless economy, a digital transaction is traceable and easily taxable which can tackle the problem of tax aversion, leaving no room for circulation of black money. The cashless economy will make people keep all their cash in the bank and hence liquidity in the banking system can be increased. It supports the growth of Indian economy. People started believing in the power of plastic money. The cashless economy does away with any hassle to carry cash hence robbery and looting are reduced. It saves the govt’s substantial cost in printing and circulation of currency notes. It creates a transparency in banking and dependency on the bank can be reduced. Smuggling, terror funding, looting, corruption can be curbed. It aimed at curtailing the menace of black or counterfeit money which is largely used to fund criminals and terrorist as part of a parallel economy.
Still, there are various challenges in implementing this idea in a vast country like India where a large number of people lives under misery and poverty. Convenient to make the transaction through online mode is not available across the country. In small cities and villages, people are suffering due to an acute cash crunch. Also, adequate security is required to guard online transaction against fraud.
The new cashless revolution ignited by this move has gradually started changing the mindset of people who earlier mostly depend on the currency note. The whole country is undergoing modernisation in money transaction with e-payment system gaining unprecedented momentum. However, the initial difficulties have subsided now and people are beginning to realise it as a safe and convenient mode of digital payment.