A Simple Note on Cashless Economy – Boon and Bane?

The entire economy of India has been dependent on cash, where small traders to big traders use cash for their business. It has always been the central part and history of this economy. Almost 86% of transactions in India are in cash, which is quite unlike any other developed country. About 95% of personal expenses are also seen here in cash. It is worth knowing that about 1.7% of our GDP is spent printing money.

The question becomes how effective and positive the cashless economy will be for the developing nation when the whole world is facing problems like a pandemic. Also, can it be beneficial after a process like demonetization? Many such positive and negative questions will be discussed here, which will tell how a cashless economy can be a boon and a curse.

A Brief Description of the Cashless Economy

We can understand only by listening to the word cashless – cash+ less. In an economy where physical notes and coins do not exist as a means of transaction, in reality, no country has gone cashless, and every country needs a physical form of cash in some way or the other.

But a cashless economy is also necessary to provide a new dimension to the economy, which we see as an alternative to digital payments.

After demonetization, the Government of India has tried to take the cashless economy to the people on a large scale under its flagship program ‘Digital India’, which is also true. It offers options like online and card-based transactions. At the same time, the main advantage of a cashless economy is to prevent corruption, and forged money, which will be known in a better way through some points below.

Advantages of the cashless economy

We can associate the cashless economy with the time of demonetization, which explains the advantages of this process better. Also motivated to opt for cashless transactions, apart from this, with the advent of digital payment platforms, most of the black money, corruption, and fraud have been successful in stopping. Some benefits associated with these will be seen below –

• Ban on forged Currency 

The most significant advantage of the cashless economy is that it has been possible to curb counterfeit currency, making it easy to declare fake currency values ​​as worthless. Usually, some people who deposit their money in cash are involved. Due to a cashless economy, the accumulated cash is of no use due to demonetization. At the same time, it also helps curb forged currency coming from outside the country.

1. Benefit of Transparency 

A cashless economy is an integral part of automatic payments, which improves transparency and culpability. It benefits liabilities and works to bring progress to the economy.

1. Limit Cash Fraud 

A cashless economy helps prevent or eliminate cash theft or fraudulent acts. After demonetization, its benefits have also been seen. Money stolen or received fraudulently will not be able to be taken by the bank or any government institution.

1. Ease of making payments 

A cashless economy enables ease of payment and time-saving, guaranteeing manageable payments. It is also an accessible medium to transfer money to regions across India, where payments can be made at the right place in working time through NEFT. It makes the transaction process easy without any hassle.

1. International Pay Support 

Cashless payments make it easy to make international payments, making cashless payments a better option during international travel.

Disadvantages of the cashless economy

If there are some advantages of cashless payment, then there are also some disadvantages, which are explained below through some points;

• Literacy rate 

The main obstacle to the cashless economy is the literacy rate. In the areas where the literacy rate is working, it cannot be considered successful, due to which there is a problem in being digitally literate. It is not easy without computers and the internet, mainly in rural and backward areas.

• Corruption 

Just as a cashless economy helps prevent corruption, it is also helpful in increasing it. It can prove to be very effective in work like taking bribes and can be used in work like hawala.

1. Cyber ​​Crime  

A cashless economy can also be used in cyber crimes, mainly hacking into banks and private accounts that fall under these crimes. It can be seen in a country like India Because it is in its infancy.

• Problems like economic inequality 

In a cashless economy, problems like economic inequality can be seen, for which all classes should have smartphones and the internet so that it can be used smoothly.

Conclusion 

A cashless economy is both beneficial and harmful both economically, physically and socially, if need be, to make it accessible to all the people and make awareness of it and impart knowledge. It helps to remove many inequalities of the country and benefits in adverse conditions, which we can see on many issues like corruption and black marketing.