Can India Become the Cashless Economy?

To achieve the cashless economy, India has to achieve the following criteria:-

1. Access to Networks:- 

According to the ITU’s (International Telecommunication Unit) ICT Development Index(IDI), India’ rank out of the 178 countries is 135, which is far below than some of the African countries. that means internet and mobile network penetration is far below than the level that is required for the development of the cashless economy.

In 2016, according to the FICCI report, Internet Penetration is 19% that means only 19% of indian population have the access to the Internet.

— Literacy levels of the People:-

In India, Literacy levels are not Uniform through out India. for example, Tribals having low level of literacy and high drop-out rate after the 5th class(in Nellore district ,77%) would face the severe challenges while performing the Cashless Transactions. The same levels of challenges will be faced by the different sections of the society. Due to low levels of literacy and knowledge about the digital world, people would be cheated very easily.

Thats why Cashless Economy is Distant Dream and cannot be achieved in near future without empowered citizenry.

2. Ownership of Networks:-

To achieve the cashless transactions, People shall have the access to SPACE in the Internet and Means to the transactions. that means, People shall pump the money into the digital world by depositing their money into their bank accounts. Poor people, whose productive life that conflicts with bank timings, cannot face the long queues, which can definitely reduce their productive timing. 

Means to Transactions is not at all uniform for all the people in India. Cashless transactions is not only limited to the debit of credit cards. It encompasses e-wallet/m-wallet and other means of transactions, which are not uniformly available for all the people of India. According to the recent survey, Mobile penetration in India is mere 17%, which is not all enough to achieve the Cashless Transactions.

This unequal ownership of networks shows the Unequal distribution of the wealth. Income Redistribution in fair manner is necessary for achieving the Cashless Economy. For Example, Recently, 24 crore jandhan accounts have been created but the amount in many of such accounts is zero. That shows the Income Inequality. Without proper income or cash in the accounts, How can India achieve Cashless Economy???!

India, which is developing country, faces the problems like poverty, Unemployment, Underemployment. By facing these problems, Achievement of Cashless Economy is distant dream.

3. Infrastructure Readiness:-

Even today, many number of villages don't have the access to the Fibre Network, Electricity, Drinking Water, Sanitation, Proper Schools and other basic necessities. Lot of the people in such situation think Cashless Transactions  and having  MEANS TO CASHLESS TRANSACTIONS as the Luxurious one and don’t immediately switch their mind to cashless Economy. 

If we look at the example, The National Optical Fibre Network (NOFN) project which aims to connect 5,00,000 villages is still in operation. that means lot of villages / panchayats are out of the digital world. Without accessing to the Fibre Network or Mobile penetration, it is impossible to achieve the cashless economy.

If we look at the access to Electricity, even today 24% of Indian Population don't have the access to the Electricity. Thats why achievement of the cashless economy without electricity, which is fundamental basic unit of the digital world, is not possible.

thats why achievement of the cashless economy is distant dream and not achievable in near future.

4. Favorable Polity:-

To persuade the people to switch to digital transactions, Favourable policies that incentivising the cashless economy are needed. That means 

1. Reducing the transaction costs, which are made through Unstructured Supplementary Service Data, Unified payment Interface, Aadhar Enabled Payment System and other means.
2. Creation of the offers, which woo the customers to the cashless transactions. 
3. Lowering the Merchant Discount Rate.

 These are some of the means to make the people attracted to the digital transactions. knowledge of these means are very limited till now. To avail the greater knowledge in this domain, recently, GOI has constituted the Ratan Watal Committee on digital payments, which will soon  submit the report for achieving the cashless economy.

5. Security System:-

Security system that supports the cashless economy is far from the desirable standards. Recent manipulation of the American elections is the fair example for the possibility of the security breach in India too.Thats why critical Infrastructure such as Communication, Banking and Health Sectors has to be protected.

 Computer Emergency Response Team of India(CERT-In) ,which has to protect India from the cyber attacks is understaffed and underpowered to face the challenges from the cyber attacks. Recent hackings of government websites, which are hosted by National Information Centre(NIC), shows the vulnerability of the NIC and its inability to face the cyber threats.

Vulnerable Secure Socket Layer(SSL) of Banking Industry and understaffed Cyber security Coordinator are really challenges in achieving Secured Cashless Economy.  

- Madhav Kiran, Aspirant for the UPSC.