A month after demonetisation, the government rolled out a slew of incentives, from ‘discount on fuel’ to ‘free accidental insurance cover on buying online rail tickets’, to push millions of Indians towards digital payments. The government’s move towards a ‘cashless economy’ by incentivisation, no doubt, is a step in the right direction. But given the widespread ‘dependence’ on hard cash in the country, this process will be far from easy. Individuals find transacting in cash easy, quick and it’s now become a habit. India is among the most cash-intensive economies in the world, with a cash-to-GDP ratio of about 12 per cent. There are enormous challenges ahead. Sixty nine per cent of the people in India live in villages and the infrastructure to support ‘cashless economy’ is not available in the present scenario. “Digital literacy” still stands low in the country. The absence of robust cyber security laws is a major threat to our dream of “digital economy.”
There is a need to intensify the public awareness about the ‘cashless system’ so that everybody will be acquainted with the system. Empower especially rural citizens, by making them digitally literate. This can be done through collaborative digital platforms and by making available the digital resources in their native language with a view to making their participation a reality. Gradual implementation of the policy with emphasis on a more comprehensive enlightenment programme on a continuous basis to deepen the message and importance is necessary to achieve greater success. Thus, there should be stakeholder engagement and grassroot sensitization.
The regulatory authorities need to be ‘proactive’ in addressing the security, technology and infrastructural challenges associated with electronic transactions. The existing laws are inefficient to restrain the cyber-crimes. Government must make concerted efforts to design an internet security framework to check online fraud so that the public can be assured and protected against cyber-attack and fraud. Comprehensive privacy protection must be drafted and passed into law before we can embark on this ‘new digital journey’ with confidence.
Since the world is moving from ‘cash’ to a ‘cashless’ one through the use of electronic-based transactions, it is imperative for India too to move in the same direction. The recently launched Unified Payments Interface (UPI) by the Reserve Bank of India, which uses Aadhar identification and one’s mobile number to make payments, is set to revolutionise payments systems in India. Demonetisation has given us a chance to move in tandem with the global trends of going cashless. Hence, it can be said that going for a cashless economy is not an uphill or impossible task; it only needs usage of the available technology in a proper way. Even Prime Minister Narendra Modi in his recent radio address emphasised that India should first focus on achieving a ‘less-cash’ society, which will then pave the way to build a ‘cashless economy.’ Going cashless brings better tax revenue, more financial inclusion and benefits to citizens too. It gives the convenience of banking from anywhere, and money in the bank earns interest. Also, there is no risk of carrying currency notes. It is thus imperative for us to overcome the multiple challenges and bridge the ‘digital divide’ which would help us realise the dream of “Digital Bharat” and also act as a catalyst for the economic growth.
(The views expressed by the author in the article are his/her own.)