Zirgham Hamid
PM Modi while addressing Nation during Mann ki Baat programme laid much emphasis on cashless economy and urged the people of India to learn how digital transactions work. While PM Modi is right in urging the people of India to learn new ways of business transactions and be a part of Digital economy, our country has not yet progressed upto the expectations and satisfaction of him. There are some crucial hurdles that are hindering the realization of a digital economy. They are:
Digital Literacy : India is a leading IT-enabled service provider to the rest of the world, but this cant be equated with Digital Literacy. This success says little about digital literacy of its population. It is reported that India’s internet usage is impressive making it second largest country after China in terms of number of Users in a country.
Mobile usage has considerably increased which inflates the internet users figure and so It conceals the fact that Indian population still have low internet peneteration. A simple access to internet through a mobile cant be very helpful in making business transaction. Sometimes the facilities of business transactions are not supported as some mobiles have small server and sometimes the internet speed is too low to complete a business transaction successfully. Not all the people can afford a broadband connection hence the rapid use of internet through mobile has misled the figures. Nearly 60 percent of the world population is still offline and can’t participate in digital economy in a meaningful way.
Unfamiliarity with new technologies: there are so many certified bank apps and other technologies available for making online business transaction, but people are not familiar with the usage of these technologies.
Majority of the population in India is not aware of online banking transaction and is not literate enough to use the latest technologies. They make more than 90 percent of their payments in cash. According to an analysis by Business standard, 68 percent of the transaction in India are done in cash.
Affordability of smartphones and internet connection: For a majority of banking applications, a smartphone is a pre-requisite. India is Asia Pacific’s fastest growing smartphone market but not more than 17% of Indian adults own a smartphone. 22% of Adults from wealthier families own a smartphone and 7% of adults from low-income families own a smartphone. Few applications require 4G-enabled smartphone. Intenet packages are very expensive. Majority of the people cant afford a 4G-enabled expensive smartphone and 4G level internet connection.
Broadband connectivity in India : Broadband connectivity is comparatively cheaper than the private service providers. To promote Online banking. The broadband connectivity need to be spreaded across the country. This would definitely take a significantly long period of time. Until and unless broadband connectivity is not spreaded, the digital online payments cant be made into application in a full-fledged manner.
Internet suspension and disruption : Since 2014, the Govt has suspended internet for 250 days at different places across the country and there were 200 days mobile disruption. Sometimes Govt suspends internet connectivity for various reasons like maintenance of law and order, preventing the candidates from cheating in exams etc. In these situations, govt resorts to suspension of internet connectivity as it has no other alternative. If we take the condition of our own state(J&K), over 60% of all network suspensions and disruptions in 2016 happened in our state alone. We spent 133 days continuously without internet in the wake of more than 4 months unrest in Kashmir. In all these circumstances how can one be damn sure that online banking transactions and other digital payments will run smoothly everywhere. All these problems are bound to occur as ours is not that much technologically advanced nation.
Confidence Deficit : Cyber Security Scenario of our country presents a very sordid face. With hackers gaining access to banking system due to overloading due to high volume digital payments and daily news regarding the fraud committed in online payment, the very question that struck to the mind of users is; Is our data safe? My dear, people can make gift of their property no matter of how much big amount but they can’t bear the shock that too of “Internet fraud”. There is a confidence deficit among a vast majority of people with respect to online payments. This is also going to take a great deal of time in tightening the cyber security with people reposing confidence in digital online payments.
The recent amendment to Payment of wages Act by the promulgation of an Ordinance by the President makes it mandatory for the employers of Industries and other establishments to make payment to the Employees through Cheque and transfer to bank accounts. However, the good thing is unlike earlier Payment of Wages(amendment)Bill, 2016, which removed the provision under sec(6) of the earlier Act regarding payment in cash, ordinance has not removed this provision. Employers can still pay to the employees in cash. The difficulty has arisen when the Govt by amending Sec(6) has removed the clause which provides for written authorization of an employee in case wages are to be given through cheque or transfer to Bank account. Many workers need cash for fulfilling their daily requirements. Moreover they have to stand in queue for withdrawl of money from the bank due to which their one day work will be lost. Workers must be given one day leave for this purpose. Most of the workers don’t even have a bank account and those who have opened their account, most of those accounts have yet not activated. Daily wagers are paid regularly on daily basis and for that cash is required. Cash can’t be totally dispensed with as it is required to workers to meet their daily needs.
After doing a comprehensive analysis of all these factors which are hindering the realization of dream of near cashless economy, it can be said that very soon, its quite difficult to transform India into a cashless economy. But less-cash with adequate precautions can be realized and promoted. To remove these hurdles, the Govt has to bring many reforms, strengthen Cyber security measures relating to online payments, make the opening of zero-balance bank accounts easier for the people especially workers, spread the broadband connectivity throughout the country and plug the loopholes wherever found. Only then India will begin to realize its dream of Digital economy in a meaningful way.
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