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Is India ready to move towards Digital Economy?

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Is India ready to move towards Digital Economy?

Post by prernajain on Wed Dec 21, 2016 12:24 pm

Analyse this statement in context of the challenges present and preparedness in this regard.

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Re: Is India ready to move towards Digital Economy?

Post by priyanka3004 on Wed Dec 21, 2016 7:44 pm

Yes, India is ready to move toward digital economy. Demonetization is the main reason of India to moving toward the digital economy even government has done this demonetization of money only for cashless economy. So, that the corruption and all the other things get reduced and the value of money will get increase. That was the massive step (demonetization) taken by government."I think, the move to cashless economy can't come soon to India. It is unfortunate that people are going through so much of a pain. But there is absolute no doubt that this is the right direction to go.
"The sooner the economy moves to a digital economy there will be less wastage, more productivity, more evolution and less of a black economy.
Because before demonetization only, Modi's government has launched so many schemes like jan-dhan yojana and all for especially the people who is living in the rural area so, the growth of India would increase little fast. 22cr bank account has been opened till now. Due to only that people are facing fewer problems now. Even now a days, every dealers, vendors, shopkeepers and even the owner of little store has been digitalize and they are using paytm, freecharge etc. so, as time will pass this will happen soon.

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Re: Is India ready to move towards Digital Economy?

Post by prerna khandelwal on Wed Dec 21, 2016 8:36 pm

One of the major offshoots of the demonetisation drive is a push towards a cashless, digital economy. The statistics are startling. Just about 2% of the volume of economic transactions in India are cashless. Less cash would mean less black money...less corruption...and more transparency.But India really ready to go digital, i don't think so. In my view, digital India is a way distant dream...particularly for rural India. As per Newslaundry.com, there were 5.3 bank branches per one lakh Indians in rural India 15 years ago. Today the figure stands at 7.8 bank branches per one lakh Indians. This shows that a majority of rural India has very little access to banks and the organized financial sector. They rely heavily on cash and the informal credit system.
Then, we have just 2.2 lakh ATMs in the country. For a population of over 1.2 billion people, that's a very small number and A majority of ATMs are concentrated in metros and cities. For instance, Delhi has more ATMs than the entire state of Rajasthan. Given the poor penetration of banks and formal sector financial services in rural India, we believe that Modi's cashless economy ambitions are a distant dream.
Then there are issues of related to security. we questioned if banks and other financial institutions were technologically competent to tackle the security issues associated with the shift towards a digital economy?
Can the common man fully trust that his hard earned money in the financial system will be safe from hackers and fraudsters?
And the answer does not seem be a comforting one!
Therefore, unless the whole financial system is made more secure and fool proof, the shift towards a cashless economy can prove to be a financial nightmare for the common man.

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Re: Is India ready to move towards Digital Economy?

Post by Niharikasingh18j on Wed Dec 21, 2016 8:42 pm

Recent demonetization has forced and coerced people to go cashless and adopt digital life for money transactions.I think to move towards a cashless economy cant come soon to India. it is unfortunate that people are going through so much of pain. but there is absolutely no doubt that this is the right direction to go. The sooner the economy moves to a digital economy there will be less wastage, more productivity, more evolution and less of black money.
While various merchants are showing trends of picking digital transactions, the bigger question is, if it is going to be a trend or just a way to fight the cash crunch. The major issue that is stopping India from becoming cashless is the Indian mindset.
People are also in a habit of paying in cash so much so that for them to shift to a new mode of payment requires a much change in their habits which will need a lot of time.
Yes, India is certainly ready to go cashless but only after suffering through a lot of pain and keeping a lot of patience.

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Re: Is India ready to move towards Digital Economy?

Post by Karishma kedia on Wed Dec 21, 2016 9:11 pm

Yes, India today is ready to move towards digital economy. The sooner the economy moves to a digital economy there will be less wastage, more productivity, more evolution and less of a black economy. Digital India has the potential to harness the talent of the young India. And if cashless economy is incorporated in it, it would actually make economy grow faster and grow clean.
The demonetisation drive has forced millions of Indians to not just queue up at ATMs but also fall in line with the government's digital push, even as online payment services firms are laughing all the way to the bank. In a nation where most consumers have been dealing in cash till now, the currency switch has provided the Centre an opportunity to give a big push to electronic transactions to improve transparency and weed out black money. The government expects the move to pay off as cash-starved consumers are taking the plunge to cross the psychological barrier of switching to digital transactions with which they were uncomfortable until now.
At present, digital payments account for 15 per cent of the $1.5 trillion worth of consumer spending in this country. This could rise to 60-70 per cent of overall consumer spending in the next two years, said Mrinal Sinha, operations head at e-wallet company MobiKwik. The scope appears to be reflected in the sudden surge in transactions of e-wallet companies such as Paytm, MobiKwik and FreeCharge. Mobile payments and commerce platform Paytm claimed it crossed seven million transactions worth Rs 120 crore on November 22. Tea and vegetable sellers in most parts of the city began transaction through digital wallets while the parking lot operators particularly in malls too accepted payments through cards of e-wallets. Similarly, patients had the option of paying doctors' fee through e-wallets at many private clinics and hospitals.
Thus, we can say that India is moving towards digital economy.

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Re: Is India ready to move towards Digital Economy?

Post by Himani Banga on Wed Dec 21, 2016 10:02 pm

Demonetization is the one of the major reason to shift economy to digital economy. It is good for the country as it will increase transparency and decrease black money as well as corruption in the country. After Demonetization our economy is moving towards cashless economy, for being a cashless economy it become necessary to move toward digitalization. But in India every one is not ready to move towards digital economy, as they are not comfortable in moving towards a cashless economy. These people don’t know how to pay online and also they don’t rely on this system as they are in the habit of paying in cash. For going cashless government should guide people how to use online portals, how to make payment online and also why they trust on that, because they have mindset of dealing in cash only. In fact many people are not having their bank accounts.

Some people are also moving towards cashless habit. Now a days every thing is available online and we can easily get it with easy payment gateway. Also at many places paytm is accepted and some people feel comfortable to pay through paytm. Government is also offering some discount on paying bills through paytm or cards (i.e. not cash). Also not only paytm many portals are available like freecharge, mobikwik, pocket etc. and they are having tie-up with many organizations, shops etc.a, so that we can pay easily through these e-wallets.

I will say some are ready to move towards digitalization, but at the same time some are not. India will take some time to move towards digital economy.


Last edited by Himani Banga on Wed Dec 21, 2016 10:14 pm; edited 1 time in total

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Re: Is India ready to move towards Digital Economy?

Post by kiran.18j on Wed Dec 21, 2016 10:05 pm

I don’t think so that India is ready to move towards the digital economy. Digital India is the dream of the country but it will take time as our 2% of the population do the cashless transaction which is very low. The rural area is the major part of our economy and they are not aware about the digital world.
But Indian government trying various means to make a cashless economy after demonetization as our government emphasized on the cashless transaction by using debit card or various wallet for the payment. Not only the goods would be purchased by the wallet or debit card but also SEBI to allow investment in the mutual funds via digital wallet as it will help in boosting digital transactions and it will attract the young investors. Their main objective of demonetization was to make our economy a digital economy as well as to reduce the black money. I think the move to cashless economy can’t come soon in India. If the economy moves to the digital economy our country will be benefitted such as there will be less wastage, more productivity as well as more evolution will be seen in our economy and the most important is that it will control the black money transaction.

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Re: Is India ready to move towards Digital Economy?

Post by sonali angelina samuel on Wed Dec 21, 2016 10:10 pm

The biggest problem with India is suddenly removing 86% of its currency from circulation without having an adequate supply of new notes ready to take their place is that fact that India is more reliant on cash than almost any other country on earth. Suddenly, hundreds of millions of people were left without the means to engage economically, to buy the things they wanted and needed, and myriad businesses were left without a readily available mechanism to receive payment for their goods, to buy supplies, or pay their staff. It’s true that the citizens of India are going through a lot of problems but, they have opted alternatives like Paytm, Freecharge, Debit/Credit cards.
Cash accounted for upwards of 95% of all transactions, 90% of vendors didn’t have card readers or the means of accepting electronic payments, 85% of workers were paid in cash, and almost half of the population didn’t even have bank accounts. Even Uber, Ola And othe E-commerce company are accepting cards at cash on delivery. Therefore, lack of cash in the economy combined with the buzz around electronic payments systems has also sparked some very innovative solutions.
So, I agree that Citizens of India are suffering but I hope this suffering will not go in vain and this major step of demonetisation taken by the government would help the economy of India to flourish and prosper and make India more digitalized.

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Re: Is India ready to move towards Digital Economy?

Post by rakshita jain on Wed Dec 21, 2016 10:23 pm

Yes,the demonetisation move by the Indian government would reduce the role of blackmoney and will lead the country towards a digital economy but moving to a cashless system will take some time.Many transactions of up to Rs 5000 happen via SMS mobile banking. A simple SMS from the buyer via the bank's payment gateway; and the payment directly reaches from the buyer's bank account into the shopkeeper's bank account within seconds. Doing away the need to handle cash. Yes I agree that lot of people from our country don't know to transact without and there is a need for creating awareness for the illiterates regarding ways of becoming cashless. But even that is not a impossible job.
To conclude I would like to say this: So many incentives and benefits from the central government then what more do we need to become cashless??
We have considerable tools, infrastructure motivation and support from the government to become cashless society. All we need is the will power to become.
The will power to go cashless can only come from our dream of a future which is clean and safe from corruption.The bank trained the villagers to adopt the technology.
This is just an example that India has a potential to adopt digital technology. Only we need is the time to adopt for new technology and a good political support from opposition rather than useless criticism.Moving to a digital way of life also helps in reducing workforce and automation of things, which is beneficial in terms of cost and operation.
With the advent of the smartphone era, almost everything is easy to reach and therefore making everything digital is the need of the hour.
That's why everything is going digitial these days.

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Re: Is India ready to move towards Digital Economy?

Post by Krishna Dhoot on Wed Dec 21, 2016 10:39 pm

According to my opinion, India is ready to move towards digital economy. The recent demonetisation has shifted whole economy into cashless economy. The focus has been on the amount of Rs 500 and Rs 1,000 currency notes that would not be deposited in banks, the broader picture stays that of squeezing cash supply in the system and ensuring that merchants and businesses keep an electronic record of all transactions making tax evasion next to impossible. As the demonetization process continues, Modi’s rhetoric is less about fighting corruption and more about transitioning India to a cashless economy.By temporarily turning off the engines which drove the cash economy, India hoped that more people could be brought into the fold by using track-able and taxable digital financing tools, like debit cards and e-wallets.
India is currently in the middle of an all out movement to modernize the way things are paid for.Even the vegetable vendors on the streets have opened up Paytm accounts and they have a machine outside their shop where someone can scan the bar code and make the payment. Undoubtedly, a digital economy can lead to more trade, better capital use, and greater competition. It can promote efficiency and innovation as well as provide an inclusive platform for economic participation. The digital economy promotes efficiency, competition, and trade and is thus capable of generating more wealth.
But this is also true that unless the whole financial system are secured and the hacking reduced, the economy cannot be fully digitalised. It would take time for economy to fully become cashless but soon we would see the new face of economy.


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Re: Is India ready to move towards Digital Economy?

Post by kajol singh on Wed Dec 21, 2016 10:41 pm

The demonetisation move by the Indian government would reduce the role of blackmoney and will lead the country towards a digital economy but moving to a cashless system will take some time, a leading Indian-American entrepreneur has said.

"This is a massive step (towards fighting blackmoney and digital economy). I think, the move to cashless economy can't come soon to India. It is unfortunate that people are going through so much of a pain. But there is absolute no doubt that this is the right direction to go.The sooner the economy moves to a digital economy there will be less wastage, more productivity, more evolution and less of a black economy," Shukla said.

"It (moving towards a cash less economy) would take a while, but infrastructure is in place," he said in response to a question, adding Indian-American entrepreneurs are highly impressed by this move of the government.

"I have not run into a single person who criticises this.His (Prime Minister Narendra Modi's) focus on startups as engine of job growth, unfortunately for India is 70 years late. But at least he started the process. I wish the first prime minster of India had focused on entrepreneurs not with suspicion and distrust, but with confidence and trust," Shukla said.The head of the Silicon Valley chapter of TiE said that "this incremental trend putting disincentive to the cash economy is the right thing to do."

Putting disincentives to use of cash in large transactions, political parties not accepting cash donations and rationalising this stamp duty non-sense for property transactions, rationalising tax structure to encourage people to be complaint would be helpful in fighting black economy.Just as building more schools does not improve literacy rates, opening accounts does not empower citizens to make digital financial transactions. Key demand and supply-side gaps remain: 23% of PMJDY accounts lie empty. A recent investigation from September found that 10 million accounts held only Re. 1, as bank officials took matters into their own hands to reduce their branch’s share of zero-balance accounts. A survey of PMJDY customers conducted by a financial inclusion consultancy found that only 33% of all beneficiaries were ready to use their Rupay cards. The others were bewildered by the complicated PIN and activation procedures. Inconsistent electricity and sporadic internet access further eroded customers’ trust in ATMs and POS machines, with one failed transaction enough to make an entire village swear off formal financial institutions. The impact of mobile wallets in hastening the transition to a cashless economy is overstated. Merely 26% of India has internet access, and there are only 200 million users of digital payment services. The World Bank’s Global Findex shows that Indians are significantly less familiar with digital banking – the use of credit or debit cards, making transactions using mobile phones, and using the internet to pay bills – than their peers in middle-income nations.

The path forward is clear: A nationwide financial literacy campaign accompanied by a medium-term strategy to improve access to, and awareness of, electronic payments. Targeted financial education programmes can improve financial skills and credit management, and increase account ownership.

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Re: Is India ready to move towards Digital Economy?

Post by Shubham Mathur on Wed Dec 21, 2016 11:08 pm

Yes India is moving towards the digital economy. Demonetisation pusses the country to do all payment majorly through digital medium.By digitization, each transaction can be tracked easily. Tax evasion will be less.And the economy will be not wholly depended on cash medium.But as per the current scenario,In India considering the present condition with respect to economic landscape and the level of technological advancement few points can be thought of which will suggest that it is little difficult for India for going completely digital .

1. Even after major step taken by Government for financial inclusion in the form of Jandhan Yojana majority of rural population are without Bank accounts which is must for being a participant of any cashless system.

2.Cashless Payment system is entirely based on Internet connectivity. In India only 34.20 cr people i.e 27% of the total population (13% of rural population) have Internet connection.Thus such a low level of Internet penetration is proving a major deterrent.

3. Cyber security is also posing a great challenge in the implementation of cashless service as we can see 32 million ATM card were hacked recently.

4. M-commerce or Payment through mobile requires smart phones and good level of e-literacy which currently rural India is lacking.Only 17% of adults have access to smart phones and only 15% of the total mobile connections have internet connectivity.

5. Also local Bricks and Mortar shops are not ready or rather not able to afford the PoS (Point of Sale) machines which is the basic requirement for online transactions. As per data available in India for the sample of 10 lacs population only 856 POS machines are available.

6. Lastly the attitude of people is also playing a major role as majority of people are still skeptical about online transactions fearing fraud and being cheated.

Thus presently, India is not ready for this transformation, but in near future India will be able to transform into a Digital economy by having necessary infrastructure required for this.A 100% cashless society is undoubtedly impossible. So I think it is reasonably fair enough to assume that if atleast 75% of transactions in the country start happening digitally then we can call ourselves as Digital Society.


Last edited by Shubham Mathur on Wed Dec 21, 2016 11:21 pm; edited 1 time in total

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Re: Is India ready to move towards Digital Economy?

Post by rohit.bharwani on Wed Dec 21, 2016 11:10 pm

Well according to my opinion,YES India is ready to move towards digital economy.A big example is front of us "Demonetization",a good initiative taken by our hournable prime minister Narendra Modi to curb black money in the economy as it will leads to transparency in transactions as well.
But talking about rural peoples or we can say some part of the economy are illiterate because they don’t know how to use wallet or pay online for any transactions from earlier times they have been using cash for transactions.At starting it will be little pain but in future it will have a great impact and the GDP of the economy will rise.The peoples have to take initiative if they start using online payments then only this programme can be implemented otherwise not.But now government is also talking steps to go digital,they are using different mediums to promote digitalization.Now a days you can find some of the small shops or local vendors have started using “PayTm”as they know India is moving towards cashless economy infact it also helps people to pay online without carrying any cash in their pocket.The village which has gone fully digitalized is Akodara (Sabarkantha) located in Gujrat.India is on the way to go cashless.It will take some time but definetly India is moving towards cashless economy.
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Re: Is India ready to move towards Digital Economy?

Post by Asif PGFB1653 on Wed Dec 21, 2016 11:51 pm

India is not yet ready to move towards digital economy. India still continues to be driven by the use of cash. Less than 5% of all payments happen electronically. This is due to lack of access to banking for a large part of the population. There are just 2.2 lakh ATMs in the country. For a population of over 1.2 billion people, that's a very small number. And majority of ATMs are concentrated in metros and cities. For instance, Delhi has more ATMs than the entire state of Rajasthan.
Another problem is security. India is not yet ready to fight against fraud. In fact, not too long before the announcement of demonetization of notes, Indian banks had experienced a major setback related to the security of debit card PINs.
But there is no way to deny the fact that the wave of digital economy has begun. Needless to say that the telecom industry is expected to boost the digital shift. Analysts expect the smartphone market to exhibit a growth of four times over the next five years along with a growth of seven times in the number of customers using mobile banking.

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Re: Is India ready to move towards Digital Economy?

Post by REEMA SHARMA on Thu Dec 22, 2016 12:07 am

We all are talking by demonetization nowadays but while studying about the aftereffects of demonetization the most prominent one is the growing digital economy. This growth can be analyzed by the following points such as :
• Increase in number of e wallet transactions: 17 lakh to 63 lakh
• Swipe machine payments: 50 lakh to 98.1 lakh
• Overall online transactions in one month: 16 lakh

From these figures we can say that yes this is a good move taken by our country which can help to pave our way towards success. One very good initiative is taken by Srinagar government that they made a policy of training one member about digital payments from every family.
But every coin has two sides similarly no doubt that this move is beneficial to us but it is also encouraging various:
 Cyber crimes rate
 Digital payments frauds
 Misuse of personal information of users
 Hacking activities
 Identity theft frauds
 First users dumped by others

So hence I can conclude that government is trying its best to push online transactions and cashless economy but they need to put similar efforts in making people aware about how to stay safe online.

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Re: Is India ready to move towards Digital Economy?

Post by arpitasharma on Thu Dec 22, 2016 12:25 am

Demonetisation is a good move taken by the Indian government would reduce the role of black money and will lead the country towards a digital economy but moving to a cashless system will take some time.The sooner the economy will have less wastage, more productivity,trade,competition and evolution.After demonetisation people are paying through mobile phones,local and vegetable vendors started using "PAYTM".Nowadays every thing is available online and we can easily get it with easy payment gateway and India hoped that more people could use taxable digital financing tools, like debit cards and e-wallets.

But this move is not that much easy as we think for the government as connectivity and internet infrastructure have also been major hurdles for payments in rural area,bank does not have much cash as they have earlier before demonetisation, increase in Cyber crimes and Misuse of personal information of user.
This move will take some time but definitely India will move towards digital and cashless economy.

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Re: Is India ready to move towards Digital Economy?

Post by Neetu Singhal on Thu Dec 22, 2016 1:23 am

As per my point of view India is not completely ready to move towards digital economy. Specially in rural areas people afraid to use digital mode of payments as they are not aware of using digital technologies.Demonetization step taken by Mr. Modi for making India cashless economy is not successful in rural areas where there is no internet connectivity, no education regarding digital technologies. Uneducated people, they don't know how to use all these digital payment modes whether it is PAYTM, NEFT etc. so until and unless they are not been educated as how to use digital technologies and all these payment gateways they will prefer to work in cash based economy.
This step of demonetization taken my Mr. Modi will surely contribute towards cashless economy as now people are no more left with cash so they have no other option rather to shift towards digital economy.
As you can see now a days most of the shopkeepers, vegetable vendors started using PAYTM
after demonetization. There are lot of shopping websites like Flipkart, Myntra, Amazon from which we can shop and pay online. Lots of payment options are available on each of these websites like Pay by debit/credit card, Net banking, card on delivery, wallets etc. which are very easy to use for educated people.
And as people become more educated they are shifting more towards digital payments because these are less time consuming, no need to carry cash, safe and secure, easy to use, record of each payment with remarks

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Re: Is India ready to move towards Digital Economy?

Post by Shubham Patni on Thu Dec 22, 2016 10:03 am

In my opinion India is moving towards digital economy, as the Centre is making a big push for online and card-based transactions in the country to achieve its target of becoming a largely cashless economy.
Govt. is using incentives like cutting down on service charge and other levies on debit/credit card transactions. The government’s initiatives over the past year or so have been focused on promoting e-payments, plastic transactions, and cashless payments to make India a digital and cash less economy. Due to demonetization business for mobile or e-wallet companies has boosted by up to 4 times But, India seems it is not ready for such an immediate shakeup.

There are lots of problems present before moving from cash economy to digital economy:
• Millions of people still don’t have a bank account, access to PoS sale points, internet or infrastructure to understand and use online payment methods etc.
• The low literacy rates in rural areas along with lack of internet access or even basic utilities in many places, it becomes very difficult for people to adopt the habit for digital transactions.
• Financial security over the digital payment channels is also a hurdle for pushing the cashless economy.

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Re: Is India ready to move towards Digital Economy?

Post by kartikay tiwari 24 on Thu Dec 22, 2016 4:58 pm

The demonetization move by the Indian Government would reduce the role of black money and will lead the country towards digital economy, but moving towards a cashless economy will take some time as people are reluctant to try new things unless it becomes necessary. The demonetization will nudge a larger number of individuals to lessen their dependence on cash transactions and resort to digital payments.

India is currently in the middle of an all out movement to modernize the way things are paid for. New bank accounts are being opened at a heightened rate, e-payment services are seeing rapid growth, cash-on-delivery in e-commerce has crashed, and digitally-focused sectors like India’s e-payment service providers have started booming.

The government is giving various incentives ranging from 0.75 percent to 10 percent on retail purchase of products like petrol, diesel and insurance products from state-run companies to encourage digital, cashless transactions. But there are various problems before India get transform into cashless economy.

Some of the problems are:
• Although mobile penetration is high, smart phone penetration is still low which is an      important component for digital transactions
• The level of digital literacy in our country is low.
• Lack of internet connectivity especially in rural areas.
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Re: Is India ready to move towards Digital Economy?

Post by rohit shivran on Thu Dec 22, 2016 5:07 pm

In my opinion India is moving towards digital economy. The recent demonetization effect has surely forced people to go cashless and it is one of the good initiative taken by Modi government to transform India from cash economy to digital economy.

The government is giving incentives to people for going to online and card-based transactions in the country to achieve its target of becoming a largely cashless economy for e.g. Government is giving 0.5% discount to customers for monthly or seasonal tickets from January 1, 2017 and also 0.75% discount of the sale price to consumers on purchase of petrol/diesel if payment is made through digital means and various other incentives. At initial stages people will face loads of problems but beginning an initiative is always tough.

People are facing various problems:
• Lack of accessibility because of limited internet penetration and inadequate Information and communication infrastructure i.e. Point of sale, ATM, Cards etc.
• Digital illiteracy: People (except for teenagers) are less aware of digital world and computer/smart phone.
• Trust deficit: People do not trust digital transaction as they do on cash

It is very beneficial for the country & public but it will surely take a long time but yes India is moving towards digital Economy.
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Re: Is India ready to move towards Digital Economy?

Post by zaid0407 on Thu Dec 22, 2016 9:40 pm

In my opinion INDIA in not yet ready to move towards digital economy because India is very big country with huge diversification and still 70 %   of the country’s population lives in rural areas.
If i talk about digital economy, India is still in lower middle income group (between $1006 to $3975per capita), means people still not earning up to their demand, so it is really difficult to say that India will going towards digital economy
Recently promotion of cashless economy in a mid of demonetization drive with a motive of bring in transparency, curbing black money and illicit transaction is quite challenging for rural areas because of
1. Lack of accessibility because of limited internet penetration and inadequate Information and communication infrastructure i.e. Point of sale, ATM, Cards etc.
2. Digital literacy and dearer internet and appliances are major hurdles in rural areas because weaker economic conditions make them unaffordable
3. Informal nature of rural economy provides sense of security among people in cash transaction.
4. Lack of exposure, financial illiteracy and illiteracy restrict them to trust on virtual transactions because of insecurity of payment and cyber loot which is widely prevalent i.e. SBI case
5. Cultural barrier such as language, orthodox and primitive characteristics of society restrict them to adopt modern means economic transactions.
6. Banking infrastructure in the form of banking correspondents is restricted to small towns rather than in Panchayat areas which hampers financial inclusion

This is as much a structural constraint as it is logistical. Card acceptance infrastructure struggles to keep pace with India’s growing population: in 2014, there were 18 ATMs and 13 commercial bank branches per 100,000 adults – in comparison the number in Brazil was 129 and 47 respectively. Between 2013 and 2015, debit cards grew twice as fast as the number of POS machines and one-and-a-half times the number of ATMs, with the majority of new infrastructure taking root in urban centres. India’s modern banking system maps neatly onto social and spatial inequalities. Only 18% of all ATMs are deployed in rural India. The RBI’s own research finds that states with a higher female population and a more rural populace show lower levels of financial inclusion.
The impact of mobile wallets in hastening the transition to a cashless economy is overstated. Merely 26% of India has internet access, and there are only 200 million users of digital payment services. The World Bank’s Global index shows that Indians are significantly less familiar with digital banking – the use of credit or debit cards, making transactions using mobile phones, and using the internet to pay bills – than their peers in middle-income nations.

The path forward is clear: A nationwide financial literacy campaign accompanied by a medium-term strategy to improve access to, and awareness of, electronic payments. Targeted financial education programmed can improve financial skills and credit management, and increase account ownership.



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Re: Is India ready to move towards Digital Economy?

Post by Nikita Garg on Thu Dec 22, 2016 10:43 pm

In my opinion,India will move towards digitization but it will take time for us to have such a scenario where everything is digitized. The demonetization move by the Indian government would reduce the role of black money and will lead the country towards a digital economy but moving to a cashless system will take some time. This is a massive step towards fighting black money and digital economy. And universal payment interface is another brilliant step  that the government of India is working on.I think, the move to cashless economy can't come soon to India. It is unfortunate that people are going through so much of a pain. But there is absolute no doubt that this is the right direction to go.

"The sooner the economy moves to a digital economy there will be less wastage, more productivity, more evolution and less of a black economy. Moving towards a cash less economy would take a while, but infrastructure is in place and soon India will become a digital economy.
So hence I can conclude that government is trying its best to push online transactions and cashless economy but they need to put similar efforts in making people aware about how to stay safe online.

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Re: Is India ready to move towards Digital Economy?

Post by SWATI SRIVASTAVA on Thu Dec 22, 2016 11:30 pm

As per my opinion, India is moving towards a digital economy. Due to the demonetization of 500 and 1000 rupee notes, cashless transactions have increased at a rapid rate. Though India has a huge proportion of digital illiteracy, using debit card does not require much digital literacy. Many state governments are working hard to spread the awareness of digital transactions. Indian Government rolled out incentives for going digital in financial transactions. It introduced daily and weekly lucky draws to encourage digital transactions.
But as we all know India is still a developing country due to which it  needs a lot of time to transform itself into cashless economy. Though no. of bank accounts have increased drastically after the demonetization, once the scarcity of new notes is reduced, there is no guarantee that everyone will use that bank accounts. With the recent hack of 32 lakh Rupay & Visa debit cards, there is a doubt in cyber security of Indian Banking. Before going for completely cashless economy, India needs to strengthen its cyber security first.
Though cashless transactions have increased these days, right now India cannot completely become a cashless economy considering its high proportion of digital illiteracy and cash transactions. But Indian Government is working towards increasing the share of cashless transactions, which is a good thing for any economy.

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Re: Is India ready to move towards Digital Economy?

Post by yashica arora on Thu Dec 22, 2016 11:50 pm

One of the major offshoots of the demonetization drive is a push towards a cashless, digital economy. The demonetization move by the Indian government would reduce the role of black money and will lead the country towards a digital economy but moving to a cashless system will take some time. India is currently in the middle of an all out movement to modernize the way things are paid for. New bank accounts are being opened at a heightened rate, e-payment services are seeing rapid growth, and digitally-focused sectors like the online grocery business have started booming. Undoubtedly, a digital economy can lead to more trade, better capital use, and greater competition. It can promote efficiency and innovation as well as provide an inclusive platform for economic participation. The Prime Minister's move to encourage digital payments will offer a strong support to our ongoing efforts in helping the country advance the cash generation to digital payment solutions. This will not only help millions of Indians overcome the inconvenience of dealing in cash but also act as a significant step towards pushing India to emerge as a truly cashless economy. I think, the move to cashless economy can't come soon to India. But there is absolutely no doubt that this is the right step taken by our government in this regard.

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Re: Is India ready to move towards Digital Economy?

Post by kshipra on Fri Dec 23, 2016 12:29 am

The proposition that the digital economy is going to deliver development, prosperity and growth has become almost conventional wisdom among policy makers, economists, and innovators alike.
A recent Deloitte report suggests that if the Modi government’s ‘Digital India’ plan can increase broadband penetration across India by 50% and mobile penetration in rural India by 30% in the next two years, this could contribute towards a 9% increase in GDP; by 2025, the Digital India plan could boost GDP to $1 trillion. The World Bank similarly argues that a 10 % increase in mobile and broadband penetration can increase the per capita GDP by 1.38% in developing countries.
The digital economy can accelerate development and growth, but it can equally exacerbate existing social and economic inequities. Currently only 40% of the globe has digital access. A McKinsey report suggests that about 75% of the offline population is concentrated in 20 countries, and is disproportionately rural, low income, elderly, illiterate, and female.  A study by the World Economic Forum highlights that in India, only 15 of every 100 households have access to the internet and there are only 5.5 mobile broadband connections for every 100 people. But the digital divide is not only about access. It is also about the degree and quality of participation among those who are already online. According to a Boston Consulting Group study, the percentage of women internet users in India is approximated at only 29%; the remainder 71% is men.
Undoubtedly, a digital economy can lead to more trade, better capital use, and greater competition. It can promote efficiency and innovation as well as provide an inclusive platform for economic participation. Unless we can provide universal access to all, the digital economy will benefit only a few, exacerbating inequities between the digital haves and have-nots.
So I can’t say that India is 100% ready to move towards digital economy as it has its owm positive and negative impacts.

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Re: Is India ready to move towards Digital Economy?

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