Essay on Cashless economy is not practicable in India for Class 10, 12, Mains Exam (UPSC, PSC, SSC)
Cashless economy is not practicable in India Essay : The Cashless Economy programme was initiated in India through the ‘Digital India Movement’(1 July 2015) by the Indian government as a vision of Prime Minister Narendra Modi. It is a bellwether programme with an aim to transform India into a digitally literate society. A cashless economy is one where the whole of society is not dependent upon physical forms of currency like notes and coins for financial transactions. Instead, all exchanges of goods and services would be done against credit, debit cards and prepaid methods.
Discussion
The first strategy adopted by the Indian government to establish a cashless economy was the demonetization of the denominations of INR.500 and INR.1000 on November 8, 2016. The sudden ban imposed upon historically prevalent currencies prevented the circulation of unaccounted cash or black money. However, this move by the government unsettled the entire economy.
Despite the ever-growing popularity of cashless transaction methods, it is incompetent to replace the traditional cash transaction method that the Indian Economy has gotten used to since times immemorial. The reasons why a cashless Indian economy is impractical are
i) Technological Backwardness: Irrespective of India being a major smartphone market, not everyone is technology-savvy. Indian smartphone consumerism is 43.5%. However, a majority of consumers are unacquainted with the complex intricacies of cashless or electronic financial transactions. The efficiency of the cellular network is comparatively poor in rural areas than in urban areas.
ii) Insufficiency of credit or debit cards: There are over 24 million credit cards and over 660 million debit cards. However, the statistics are deceiving for an individual who possesses multiple debit or credit cards for instance 3 or five while others have none. There is a prominent concentration of debit or card owners in some sections of society whereas other sections show negligible user rates of the same. The over-insufficiency of credit cards makes the possibility of a cashless Indian Economy impractical.
iii) Insufficient Bank Accounts: The World Bank Report of 2014 states that only 53% of Indian Adults own a bank account most of which are dormant. Although, the number of bank accounts in India is on a steady rise in the following years, and the accounts are regularly active. It still leaves an overwhelming 47%, millions of people without active bank accounts. This makes the probability of a completely cashless economy bleak.
iv) Lawlessness on Data Security: Reservations about data security and internet protection are popular amongst the masses. Their distrust of cashless transactions is a result of the absence of any law guaranteeing them internet banking security. Despite banks and payment companies’ relentless efforts to make cashless transactions secure, their lack of accountability makes them non-liable to their customers.
Conclusion
To surmise, a cashless economy is plausible for a developing country like India to take long strides in becoming a prominent economy in the world, however, a few major obstacles have to be eradicated to do so successfully. Agencies to legislate laws for data protection have to be established. In addition, an efficient and trustworthy cyber-security system has to be in place to appease the masses. Simultaneously common citizens need to be technologically literate to make a completely cashless economy practical.
FAQs on Cashless economy is not practicable in India
Q1. What is the Digital India Movement?
Ans: Digital India Movement is the forerunner of the Narendra Modi-led central government to establish a Cashless Indian Economy. It began on 1 July 2015.
Q2. When and why was Demonetization implemented?
Ans: Demonetisation was implemented on 8 November 2016 to check the unauthorized circulation of unaccountable INR.500 and INR.1000 denominations.
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