Cashless Economy - The Key To A Reform

Despite every government efforts, demonetisation has turned out to be a failure. Not just because its implementation was disastrous, but because a black market has evolved to convert black money into white ridiculing this ‘bold’ and ‘historic’ move. I have summarized in my previous post why just demonetisation cannot end corruption or even black money.

It must be noted that demonetisation has been implemented before it could leak out to the media sources. There must have been a large workforce for printing a huge number of notes in such a small time and for other preparations to enforce this plan smoothly. The new ₹2000 note had already begun leaking on social media as everyone could not remain silent for a long time. That probably explains why this decision has been taken in some haste and the government and RBI of not being ‘fully prepared’ for this move resulting in a cash crunch.

But, it's good that what began as demonetisation has now been transformed into a cashless revolution. Unlike demonetization, the prime minister Modi's call for a cashless or less-cash economy can be a real game-changer in cleaning the long-standing corrupt practices and thus the entire system. However, it cannot be implemented overnight like demonetisation. It is a behavioural change at all level of the society and it will take its due time. The government has already started the campaign to encourage cashless transactions. It is important for the people to adopt cashless means without delay.

The Jan-Dhan accounts and increasing affordability of smartphone can serve as a catalyst for this cashless revolution. India already has over 1 billion mobile phones which is a boon and going to make this revolution even easier. Therefore, India has already geared up for this revolution.

The raw stage of black money is cash and most of the black deal is finalised in cash which gradually gets converted into the other form such as gold, real estate, etc. It would not be an exaggeration to say that cash is the root of all corruption. Therefore, people must adapt themselves to a cashless Indian economy. It will serve the interest of the biggest beneficiaries of government services – the poor and the common man.

There should be a strict regulation of cash flow, especially in large transactions. Though a certain limit of cash has to be allowed because of the obvious compulsion, large transaction if done in cash should be penalised heavily.

But, the behavioural change is not easy because of the psychological attachment of Indians with cash which cannot be changed from outside. It will come from inside. Change is the law of nature and humans have been the fastest evolving species. So, from an evolutionary point of view too, it is also not difficult.

In India's path of becoming a developed country, there cannot be any room for corruption and black money. Going cashless completely in the near future for a cash-obsessed nation may be difficult. But yes, it is certainly possible!