Ram Rattan Sharma
The vision of the present Government to march ahead with all measures necessary to achieve a more transparent and less corrupt society are aimed at rooting out black money and moving to a cashless economy in which transactions can he tracked ,which in turn lifts tax collections and ensures that credit flows to the less privileged. With the country moving to a new way of concluding payments i.e., by using credit / debit cards, electronic wallets, mobile banking etc. what has got hit hard the most is the movement of cash. The parallel economy which has no transparency and thrives on anonymity of the currency has taken a backseat as people are left with no option but to resort to cashless transactions. If all transactions are electronic then all transactions can be chased ,can be recorded, checked. And thus it will be possible to circle the menace of black money ,which has been denting the tax base, tax collections ,encouraging, terror financing ,drug distribution, generation of fake currency and it will also reduce real estate prices .Not just this ,some of the other advantages which has dented the generation of black money is the fact that digital payments bring in greater efficiency in welfare programmes as money is wired directly into the accounts of recipients .Thus once the money is transferred directly into a beneficiaries bank account, the entire process becomes transparent. Payments can be easily traced and collected and corruption will automatically drop so people will no longer have to pay to collect what is rightfully theirs .
Demonetization caused a cash crunch and forced the Government to push for electronics payments and transfers .Though the main pitch of demonetizations was towards curbing financing of terrorism and eliminating black money, a major shift towards a cashless economy emerged as a necessity . In fact our dream is that there should be a cashless society .Though 100%cashless society is not possible .But we can make start with a less cash society .Although the narratives of demonetization has changed. The Government has been sowing the seeds of a cashless economy .In February 2016, the Government of India approved the guidelines for promoting payments through cards and digital means .A massive change from the informal cash-carry system to a formal financing payments system will give an impetus to the payments and the settlement system in India .The best way to reduce corruption and black money in the country is to move from an economy dependent predominantly on cash to electronic transfers which needs universal banking access &facility .A cashless economy runs on credit or debit cards ,electronic funds transfer or on line shopping instead of cash .The idea of cashless economy is actually a revolution from the fiat money to digital money, generally adopted with the aim of curbing the flow of black money and increasing transparency of the flow of cash. All transactions are made with cards or through digital means. Internet banking the recently launched unified payments interface are other products of technology that are directed towards going cashless .It is being opined that in the near future even credit/debit cards will become redundant or all transactions would be made possible through a smart phone, and a mobile phone code would be sufficient to with draw cash at ATMs, and there would be no need for a card.
The Indian economy is one of the fastest growing economies in the world ,But it suffers from issues like black money ,corruption ,terrorism ,illicit wealth etc to break the grip of corruption and black money, there have always been various ways like auditing and enforcement agencies, but the idea of cashless economy is more appealing ,as most economic transactions would be a part of the formal system and easy to track. In India, few use non-cash payment methods. However, the challenge is to strengthen the digital infrastructure of banks and to make transactions safe .Cashless society offers the government and the public many advantages , as an online payment relatively is risk free, It will decrease crime rate ,many anti-social and illegal activities like drug trafficking ,financing of terrorism and money laundering are carried out only in cash. A cashless economy will make it difficult to carry out such operations as cashless transaction can be easily monitored by the Government. Therefore, tax evasion would be difficult. The past two months have witnessed a significant increase in the digitization of transactions in India and installation of swipe machines. The move towards a cashless economy might help curb black money by reducing tax evasion and ensuring transparent functioning of the economy large section of society would need longer time to adapt to move to a cashless society .The mode of transactions might seem difficult to adopt initially but it will ensure that the country takes its first step towards a trans[parent economy .Soon after demonetization, government took a variety of steps to motivate people and seek their attention towards various digital modes to be adopted so that people do not have to stand in long queues out side the banks. The RBI and commercial banks need to come up with an innovative idea that enables cash; less transactions and makes them safe and easy to perform . Banks have been widely adopting the non- cash payment mode to meet the objective of making transactions faster ,improving efficiencies and tackling the growing burden of government welfare services through bank accounts .Not with standing, less than 5percent of all payments are electronic, India continues to be driven by the use of cash .Sweden is one of the top five cash less economies in the world. It has already adopted affective policies to facilitate transactions using mobile or plastic payments through digital infrastructure . Sweden is the first country to promise to go 100percent cash less by 2020 and leads the race to become a cash less society. Technologies plays an important role when we talk about the policy shift from cash to cashless .However ,there are huge differences in terms of base and other crucial dimensions.
Demonetization has encouraged the entire economy to use less cash but has left various challenges for the people and also for the Government .There is unanimous agreement on the need to go digital .But this cannot be achieved without proper infrastructure and cyber security remains a key concern. Educating People in rural areas to improve infrastructure and logistics is required. The Government will have to spend a lot of time in deciding policies to overcome these flaws .India will not turn cash less immediately; first the Government should consider the problems people are facing and how to overcome them. Achieving a 100 percent cashless society will never be possible ,but one can start from a less cash society and then move towards becoming mostly cashless. Cash will still play an important role for discrete transactions especially in the remote areas. These transactions can be automated with up coming technology. Digitising financial transactions can prove to be an effective means of curbing the large parallel economy in India increase the tax base and reduce the need to carry cash, fake currencies and their use will fade away and money laundering will godown ,for this change IT infrastructure would be required on a grand scale. However move towards cashless economy depends on how we deal with issues like cyber security, online frauds and awareness campaigning.
(The author is former Dy Librarian University of Jammu)
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