India - A Cashless Economy?

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Will India become a cashless economy? It may! but, it'll take it’s own sweet time. India has it’s own distinct problems before becoming a cashless economy. 



                            



       The mention of ‘cashless society’ started when the government decided to demonetize 500 and 1000 currency notes in 2016. Since then the platform has seen a consistent rise in user adoption and transactions. Demonetization forced many Indian’s go cashless. However, the real deal started with the innovation of UPI (Unified Payment System).

       The majority of UPI transactions are done either by Phone pe or Google pay. According to the sources Phone pe reportedly recorded 835 million transactions in October 2020 and Google pay claimed around 820 million. Paytm and Amazon Pay are distant third and fourth players with 245 million and 125 million transactions respectively.

        “However, India’s reliability on cash is not decreasing.”

        It may be noted that in order to become cashless, a country needs physical infrastructure to aid the shift. This involves parameters such as high-speed internet, wide mobile network coverage and financial infrastructure in banks.

        However, not many realize that physical infrastructure is only part of the equation. The switch from cash to digital is not possible without psychological and behavioral change as these factors are responsible for hindering the transition.


       The top most challenge to face is digital illiteracy which needs to be ensured not only in youth but all sorts of age group and that will eventually lead a boom in digital transactions. And not only that, people from all service sectors are bound to corruption. Higher incomes poses higher taxes which people do not pay. So transactions go hand in hand in the form of hard cash especially, unaccounted. From a business man to a government official, all are a part of corruption which possibly results in hindering the online transactions


       As far considering the Global View There is no economy in the world which is 100% cashless. Everyone is aiming towards it but still use Cash, Sweden which is the most cashless society use 3% of their transaction in cash. Our economy will definitely become stronger but 100% cashless is not even good idea to even have for any economy. The sense of ownership of holding the currency is important for individual and democracy. So considering all these distinct problem India will take its own sweet time to reach its new heights.

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