In India, a cashless economy is when most monetary transactions occur electronically through debit cards, credit cards, net banking and other options. A cashless economy means the redundancy of physical paper cash. Paytm, Phonepe, and Google Pay are some of the fintech platforms for digital transactions. And the physical cash circulation is minimal. A cashless economy has the advantages of cashless transactions from preventing money laundering, deterring the shadow economy, increasing the tax base and compliance, and convenience for customers. People are aware of the benefits of a cashless economy. Electronic transactions are much easier and more transparent. But are all the citizens ready to face this system of cashless economy in India? In today’s article, you’ll get a brief idea about the cashless economy in India and whether it is a bone or bane for the nation.
What is a cashless economy in India?
In today’s time in an economy, financial transactions occur not with money in physical form (banks, notes, or coins) but through the transfer of money online. The initiative of Cashless India has been launched by the Government of India to promote digital payments. The purpose of the same is to have a better watch over the transactions of people, which will help reduce tax evasion and transfer of black money within the country as well as abroad.
Demonetization and Increase in Digital Payment by the Government
In 2016, the government announced the devaluation of the old notes of INR 500 and INR 1000 to reduce black money and fake currency, a part of which is used to fund criminals and terrorists. This was the initiation of a cashless economy in India because people now had less trust on physical currency. This decision also led to a temporary shortage of cash in the economy, and digital transactions started becoming a big thing as the solution.
Advantages of Cashless transactions
- The primary advantage of a cashless economy is that one does not need to carry cash everywhere. This reduced the risk of loss of cash due to theft and eliminated the stress of carrying too much cash in pockets.
- There is no danger of counterfeit money because money is sent and received from and to the banks directly.
- All transactions can be tracked very easily, which creates fear in the mind of people with wrongful motives. This discourages black money and illegal transactions to a huge extent. Tracking digital transactions is easy because all the records are kept with the banks as well as payment gateways. This also results in more transparency in terms of the utilisation of funds.
- Since transactions under a cashless economy are done through organised channels, it is impossible to evade tax. And as a result, the government gets more tax revenue.
Keep these things in mind while going cashless
Although cashless transactions are quite secure now, frauds still continue to happen very frequently. Therefore, you should take some essential precautions so that you can enjoy these services rather than ending up getting tricked and losing your hard-earned money.
- Keep in mind to never share your personal details such as OPT and PIN. People having access to such details can easily steal your money. Always keep these details to yourself.
- Do not open suspicious emails, do not visit websites with the same name as the bank. They often do not come with good intentions.
- Do not click on what you do not understand. Learn to perform these transactions before actually sending and receiving money.
- Do not use public WIFI for cashless transactions or money transfers as attackers can steal your information easily.
Conclusion
A cashless economy is a system where all the monetary payments are made using digital means like internet banking, debit, credit cards, and e-wallets instead of hard cash.
However, the number of cashless transactions has increased sharply. Youth is especially supporting a cashless economy. India does not appear ready to go completely cashless, but partial cashless is also an option to adopt in the current situation. Rural settlement inclusion in this process will make the process faster. And due to the increase in cashless transactions, theft or illegal activities are expected to reduce over time.
