Think Future, what would happen if India stop cash payment and allow only digital transactions all over the country?

Let's discuss about the possible disadvantages -
1: Security threats: I agree there is always a risk of hacking in digital world, however it cant be a valid excuse for not going cash less, the reason is - your money is not safe, even when you are carrying cash in your wallet and even when you put it in your home locker, there is always a chance of theft, and this fear of theft has never stopped us from using cash in past, in a similar manner using cash less mode of payments should not be a problem as well. Yes system won't be 100℅ secure, however we can always try to make system more secure and difficult to break, we can also have numerous amount of backups to restore the system in worst case scenario.
2. People are not literate enough to use cashless payment: Again not agree with this point. We always connect digital payments with expertise in using modern gadgets and think that illiterate people can't use it. Let's imagine an illiterate villager who can't write or read and has never ever heard a name of ATM in his lifetime, however that fellow is able to use currency notes as a medium of transaction. Tell me one thing, for a person who could easily do transaction using different amounts of currency notes and several coins, how difficult it would be for him to use only one card and to remember four digits of pin number. (Yes, it would be the job of government to make sure he gets a bank account). We can have a technology that would not even require him to remember pin number and can verify user using his/her fingerprint, in case you find that part of transaction difficult. This would save our illiterate villager from even remembering the digits. He/She can carry their card everywhere instead of going through hassle of cash.
3. Several people do not have bank account: main advantage of demonetization was that the huge number of people got connected with banks. With a little more efforts we can easily have remaining once on the board as well. So this point should not be an excuse for not going cashless. Unlike demonetization move, which requires surprise announcement, banning all currencies and allowing only digital mode can be implemented in several steps, for an e.g government can give a couple of years of timeline for all merchants/vendors to start accepting cashless payment. Once this time period is over, merchant/vendors must accept cards for selling any items if a customer wants to pay using it, and not accepting it for selling anything should consider illegal. However a customer can still use cash for the payment. Once everything can be purchased using cashless mode people will start moving towards it. The government can set another two years of timeline for rest of the people to learn how to use card or mobile or some other way of the cashless transaction for the payment.
4. No internet connection : if telecom companies like BSNL can provide mobile coverage even in remote villages, how difficult it would be to provide internet connection to those remote places. If government has to do some investment for it then it should do it.

Let's discuss the advantages now-

  1. No tax evasion - the biggest advantage of this move would be no tax evasion, it might not be unearthed black money already stored in gold and some other forms in the past, however, it will certainly stop future Black money generation.
  2. No corruption: Yes, the traffic police on the roads or ticket collector in railway would not able to ask you for money in exchange of avoiding penalties, this will result in huge income generation for government bodies.
  3. No hassle of tax calculation for people: the government would know every detail of money you have earned and spent, hence the system can automatically calculate your tax and can deduct it from your account at the end of the year. No more visits to your CA in March end. Tax structure would become more simple.
  4. No issue of fake currency
  5. Save huge amount of money spent on printing or maintaining cash - No need to print currency, no need to replace currency notes which are in bad condition.
For more details: click here

Comments