The Indian government is working to make the country’s economy cashless, however this goal is shared by all governments worldwide. We will discuss why the Indian government wants to eliminate cash from the economy today. How about defining a cashless economy? both its benefits and drawbacks.
The term “cashless economy” refers to an economy that does not accept cash, or you could say that there is no cash flow in the economy. Plastic money or electronic channels are used for all transactions. In a cashless economy, you can make purchases using your mobile wallet, plastic money, such as a debit card or credit card, or online banking, or payment apps like Gpay, Phonepe & Paytm instead of carrying cash.
In order to reach its goal of creating a fully cashless economy, the Center is actively promoting internet and card-based transactions in the nation following demonetization. These payment methods make it simple for the government to keep track of every transaction. It aids in reducing the circulation of counterfeit money and illicit money. Digital transactions are simple to use, and carrying cash is not necessary. Additionally, it decreases the amount of currency notes and coins produced, which also lowers the cost of production. The data generated by cashless transactions can be used by the government to analyze and enhance its policies. Officials can predict or identify activity patterns using such data, and they can utilize this knowledge to develop the urban areas for things like housing, transportation, and energy management. Cash is challenging to track. Cash can also be used for illegal operations including tax avoidance and the laundering of illicit funds.
Although a cashless economy is tremendously advantageous to our nation, there are some drawbacks as well. The lack of adequate monitoring of the data and cybersecurity concerns with cashless payments is a growing source of concern for many consumers. On the other hand, consumers worry about their privacy because every transaction leaves a digital trace.
Cash continues to be a dependable, secure, and trusted method of payment for products and services, despite the many new convenient methods consumers can do so. Additionally, it has a definite sense of value, which is useful for creating a budget. Cards and mobile payments give customers flexibility, choice, and convenience, but implementing a fully cashless economy in a place like India is challenging.