After Demonetisation, the sole emphasis of the Government is on Cashless Economy or Digital payments. The bold step of demonetisation taken by the PM would become a nullity if the whole country does not adopt cashless transactions. The government wants every citizen to open bank account and use the option of debit cards, credit cards and online payments for all its transactions. If use of cash currency is minimised in our economy there can be no doubt that our economy would become manifold stronger.
Cashless economy refers to an economy where all payments are online and there is minimal use of paper currency. The purpose of cashless economy is to put an end to the rampant corruption and running of a parallel economy in our country. It is noteworthy that the government incurs an expenditure of Rs. 39/- in printing of every new currency note. The more currency printed means a substantial financial burden on the government. Less currency in the system would imply less cashiers in the bank and lesser number of currency chests in the country. Moreover, once the transactions are made digitally through the computers, there would be lesser chances of errors. The incidences of terrorism, crime, separatism, Naxalite movements would be minimised as their funding in cash would be curtailed. It is noteworthy that terrorism hit Kashmir is returning to normalcy after the current demonetisation. The use of Fake & counterfeit currency would be curtailed once we adopt cashless economy.
The government has come out with a lot of incentives to motivate digital payments. On the 30th day of demonetisation, the FM has announced a number of discounts on the use of various modes of digital payments. For every railway ticket purchased online, there would be a complimentary insurance of 10 lacs for every passenger. On the purchase of diesel & petrol through card or cashless would entitle the purchaser a discount of 0.75%. The policies of public insurance companies purchased digitally through their websites would entitle the policyholders a massive discount of 8% of the premium. Toll tax on the National Highways paid through digital medium would entail 10% discount. Suburban railway passes shall also be cheaper when purchased digitally. In another decision of the government, no service tax shall be levied on purchases up till Rs. 2000/-. By these measures the government is luring the citizens to adopt cashless transactions. A number of advertisements and addresses of the PM are frequently telecast to woo the viewers.
It is true that cashless economy would benefit our economy in all dimensions but the million dollar question is whether cashless economy is suitable for a developing country like ours where more than 90% of our citizens are not computer literate. In a country which does not have electricity in half of its villages, where regular power cuts more than half a day are very common, where internet connectivity is a major concern, where the system lacks networking, cashless economy is but a distant dream. All of us face problems everyday due to poor internet connectivity in the banks & the railway reservation counters. Moreover, all of our mobile phones are not smart phones and cannot be used for all cashless transactions.How can a small shopkeeper, daily wager, senior citizen, school going children or housewife use PAYTM, ATM, credit cards, debit cards & online banking for making cashless payments. A small keyboard error can be fatal for such people. Moreover, there are increased chances of cyber frauds & cyber crime. Instances of Credit card cloning are on the increase. There are other safety issues like lack of privacy, fear of hacking & language compatibility. It is being advised by experts to maintain 2 accounts- a prime account which has your hard earned money is parked having no facility of online banking and debit card. The secondary account, which should have a small working balance, should have facility of both online banking & debit card so that your risk of fraud can be minimised while making digital payments. It is ironical that in a country where a big chunk of bank account holders do not even know to sign and use thumb impressions on cheque books and withdrawal forms, to think of a cashless economy is a mockery. It cannot be disputed that cash payments are time saving. Moreover, we have been using cash currency regularly in the past and it is almost impossible to instantly switch over to cashless transactions. One more aspect needs consideration. Our country has just 15 lac terminals which works to just 70 terminals per lac of our population. Moreover, digital payments entail cost to the purchaser, which is a deterrent factor. Similarly there are ‘merchant costs’ which reduces the profits of the traders and service providers.
Cashless economy is a necessity of tomorrow but it is not practical to make the same mandatory. The government should implement it in a gradual, planned and time bound manner. Cashless transactions should be voluntarily encouraged so that it becomes acceptable and the preferred mode of making payments in future. Give people choice and time to switch.
(Author – Inder Chand Jain, Agra, Mobile:9319215672, Email: firstname.lastname@example.org)