Cashless Economy in India: It's Pros and Cons

India is a country of diverse cultures from the start so talking in the context of the cashless economy it is no different. There is already a various mode of payment in our country operating functionally, but people usually prefer ‘Cash’ money as the mode of their payment. Shifting from Cash mode to no cash i.e. virtual methods of payment is a long journey in our country as the Cash and coins are popular from ancient times having sentimental values and unlike virtual money, they are physical that can be felt and touched hence more credibility. 

Demonetization and efforts of Indian Prime Minister Mr. Narendra Modi have opened a door for the cashless economy. Cashless payments are not an alien thing anymore. The cashless economy has lots of pros and cons which can be discussed as follows.

Pros of Cashless Economy in India:

Simple: Cashless modes seem hard to adopt at first but once we get used to it. The simplicity and hassle-free payment will ease the way to use this mode.

Authentication: The money in the cashless economy can be easily tracked and traced as they come with a transaction ID and a unique code.

Security: As the money is available virtually in your account, apart from the case of cyber attacks the money is hard to steal and encryption in payment makes it more secure.

Availability: The money in the account can be accessed from anywhere and anytime If you are connected to the network. This made use of cashless money more convenient.

Curb in corruption:  One of the several benefits of the cashless economy is that It can be tracked and a record can be maintained. This reduces corruption so low in terms of money as black money can’t be kept by the one under the bed.

Tax base Increment: To avoid paying tax traders, shopkeepers, and small businesses deal in cash as means of their regular payment. The cashless economy will surely be going to force them to pay their service and sales tax on time and in a proper manner as this cashless economy is channelized and monitored by the proper institutions such as banks and government. This will create more transparency in the payment mode which in turn less corruption.

Reduction in cost: The cashless economy helps us to reduce the cost of producing money in form of cash and coins that help in less consumption of resources.

Growth in GDP: It is seen that the use of cashless transactions made online shopping and buying things easier, so people started spending more money to buy things and a range of products. so more spending on money leads to growth in GDP, which can be seen in several countries like the USA and Singapore.

Opportunities to business: This also creates a new door for opportunities for large scale business to small and medium scale business. The online payment has done shopping and selling easier for all. A business can run an online store with less on minimum involvement of banks and can accept payments from all around. For certain amounts, businesses can pay using a Tap to faster the process. Moreover, Individuals can sell their hand made craft, art, product, and services online from anywhere.

Cons in a Cashless Economy:

The cashless economy has facilitated a lot but it has some cons as well –

Lack of awareness: Although, India is ready for accepting cashless transactions this fact can be denied that most of the Indian population is in the rural area and the majority of them don’t even have a mobile phone. If we look at the labor class of India they are not educated enough to accept the payment online, the majority of them are daily wage workers so it is hard for them to switch to online transactions.

Security issues: Shifting of the mentality of using cash to card and other online modes of payment could be hard from the Indian point of view. As most of the population are hesitant in using due to lack of awareness or security issues. Technology has enhanced the security to make online transactions secure and simpler but they are still prone to cyber-attacks and frauds. This is one of the major hurdles in the way of acceptance of the cashless economy because people don’t want to risk their money.

Lack of technological developments in India: Boasting about digital India can be a thing but it is suffering a lot in the present scenario. It is also suffering from corruption and lack of services and apart from this, there are chances of hacking, theft, and stealing of data. Hacking of digital money is also possible, several instruments can be used to withdraw money from ATM and Debit cards. Passwords can be exported to suspicious devices. So, making a system reliable is also going to be a huge task for India.

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