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Is India ready to move towards Digital Economy?

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Post by sonakshi chadha Sun Dec 25, 2016 11:51 pm

Is India ready to move towards Digital Economy?
After the announcement of demonetization, Indians were forced to move towards a cashless economy. The prime minister of India has solved two purposes with his announcement of demonetization, that is, to remove black money and to take India towards a digital economy. According to me, India will take time to be a digital economy. As India’s rural population is not that dynamic to except this change to accept the idea of a digital economy. Indian’s will take time to accept this change of a digital economy or cashless economy as there is lack of knowledge among people about what exactly cashless economy refers to. Cashless economy doesn’t refer to “no cash” but it refers to less cash. This move of turning India into a digital economy would help in the overall growth of Indian economy. People should adopt this change as fast as possible and also provide knowledge to other people who don’t have a access to digital world or have difficulties in operating or using the internet. As India is a developing country, so it will take certain years for the country to develop into a fully digital economy. People having access to these digital wallets should create awareness among the people around them so that this change can be adopted at an early stage.
"India will surely turn into a digital economy but at a slower pace."

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Post by Sakshi Taneja Mon Dec 26, 2016 12:02 am

DIGITAL ECONOMY
A cashless economy is one in which the purchase of goods and services and the payment of debts and remittances are done through electronic money media, either through credit and debit cards, direct transfers from one account to another, smart cards, mobile payment systems, and other technologies.

                                                          INDIA BECOMING CASHLESS

India is currently one of the fastest growing economies in the world. According to a report by the World Bank, India’s Gross Domestic Product (GDP) is being anticipated to grow up to 7.5 percent in 2016.
Observing and supporting this constant advancement, the Government of India has hinted towards making India a Cashless Economy, as a part of its Digital India blueprint. A cashless economy refers to a system in which flow of cash within an economy is invisible and intangible.

Many steps are being taken to infuse cashless monetary solutions in India. The Reserve Bank of India (RBI) has made announcements regarding the same, enabling better cashless transaction facilities mainly towards rural areas.

From the moment higher denomination notes are demonetized, 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

BUT,
India has a huge population of digital illiterates. It’ll take a lot of time to transform everyone into digital literates.
No country is a fully cashless economy yet. India is still a developing country, and needs a lot time to transform itself into cashless economy.
Though no. of accounts have increased drastically after the demonetization move, once the scarcity of new notes is reduced, there is no guarantee that everyone will use that bank accounts.

THUS I WOULD SAY THAT...
Indian’s will take time to accept this change of a digital economy or cashless economy as there is lack of knowledge among people about what exactly cashless economy refers to. Cashless economy doesn’t refer to “no cash” but it refers to less cash. This move of turning India into a digital economy would help in the overall growth of Indian economy. People should adopt this change as fast as possible and also provide knowledge to other people who don’t have a access to digital world or have difficulties in operating or using the internet.

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Post by pallavi maindola Mon Dec 26, 2016 1:50 am

I strongly believe that India is ready to move towards Digital Economy. Not only ready to move but one fourth of the economy has accepted the digital or cashless economy even. Demonetization scheme was a unilateral initiative that was planned in secret by a small group of insiders tied-in with the of India’s government as because Cashless Future Is the Real Goal of India's Demonetization Move.
It pushed millions of new users onto the country’s digital economic grid by virtual fiat. People themselves are willing to move towards electronic payment.
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 the online grocery business have started booming.
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.
A lot more retail outlets are accepting e-wallets, this is revolutionary, and survival of the fittest.
Modi’s demonetization initiative has been a boon for India’s e-payment providers. Pay Tm reported a three-times surge in new users — tacking on over 14 million new accounts in November alone. While “oxygen wallet’s daily average users increased by 167% since demonetization began. Ever after demonetization announcement, there is a spike in both app downloads & merchant registrations. This spike is now coming from all cities, big and small, Pan-India, consisting of small merchants like vegetable vendors, kirana shopkeepers, street vendors, rickshaw drivers, taxi’s etc., who’ve signed onto oxygen wallet app for the merchant payments service.
Cryptocurrencies like Bitcoin and also been the recipients of a positive upswing.
The lack of cash in the economy combined with the buzz around electronic payments systems has also sparked some very innovative solutions. The farmers’ markets of Telangana began experimenting with their own electronic payment system. where customers with Aadhar-linked bank accounts could buy vegetables using tokens which could be purchased via debit cards.

SO, these are all the examples which demonstrates that people of India is moving towards digital economy and very soon the day will come when India will emerge as a truly cashless economy.



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Post by manishnaruka Mon Dec 26, 2016 11:53 am

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.

1. The PM will present the government’s road map for digitising India by unveiling various schemes worth Rs 1 lakh crore like Digital Locker, e-education, e-health, and a national scholarship portal.

2. The government is likely to implement a number of policy changes. These include open software adoption, BPO policy for creating BPOs in smaller towns, electronic development fund to promote creation of intellectual property in India. The government has targeted the Digital India initiative to reach its full impact by 2019.

3. The project aims to establish broadband connectivity in 2.5 lakh villages, promote e-governance, universal phone connectivity and for India to be a global leader of IT in services like health, education and banking in order to transform India into a connected knowledge economy.

4. Digital India Week is likely to witness many agreements in this sector, for example, agriculture Focused Website, project for students like e-schoolbag and many more to improve accessibility and facilitate better knowledge sharing

5. The PM may announce the names of brand ambassadors in different sectors to promote digital india project.
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Post by Ankur Parwal Mon Dec 26, 2016 12:04 pm

In my opinion Indians are very emotional and tend to quickly come to conclusions without delving deep into issues. The public outcry against demonetisation — especially by those who are at the receiving end — is one good example where emotions run high, with few solutions at their hand to face the problem of cash crunch.
One can’t do much, but to sympathize with those who faced the brunt of PM Narendra Modi-led government’s abrupt demonetisation move on November 8,2016.
> The banking infrastructure in India is still weak in terms of reach and not large enough to cater to the teeming millions in interior India.

> Depending on one’s political leanings and personal financial situation, people have described the move as either an “economic robbery” or a “masterstroke” in the war against black money.

> With more than five weeks gone since the demonetisation announcement, there is no doubt that the Prime Minister is on the backfoot, with some of the initiatives, as part of the exercise, backfiring on the government.

Scheme for hoarders-
> Nobody expected — not even the government — Indians to return so much old demonetised notes (nearly ₹13-14 lakh crore) to the banking system, prompting the government to hurriedly design a scheme-Pradhan Mantri Garib Kalyan Yojana, a last and final chance for black money hoarders.

> The banking system-a key partner for such a massive exercise was ill-prepared to face the situation. The Reserve Bank has issued 60 directions and notifications after November 8, making life more miserable for those standing in queues. Either by design or coincidence, the absence of adequate new currency has left a bad taste among people, especially those who had to face withdrawal restrictions from banks. Bank officials themselves exploited the situation at the cost of small-time bank customers.

> The main criticism justified to a large extent against the government is that demonetisation has inflicted more pain on the poor and innocent while opening a window for the rich to cleanse their unaccounted income, of course, after paying a handsome share to the exchequer.

The jury is still out on whether demonetisation was the best route to tackle the fake currency problem.Since 16 out of 250 are fake notes.

But, one thing is clear that “Demonetisation alone can’t turn India cashless. It is only a signal to India and Indians that money in their hands has changed shape.”

Dominance of cash-
> The dominance and significance of cash in India’s monetary ecosystem is mind-boggling. A 2015 report by Price water house Coopers pegs cash transactions at 98 per cent of consumer transactions in value terms and 68 per cent in volume terms, much higher than comparable economies, such as China, Brazil and South Africa.

> The Jan Dhan-Aadhar-Mobile (JAM) trinity, Rupay Cards (which made a splash in 2014) and now Unified Payment Interface have put in place a robust base for India’s digitisation programme to take wings.

> There is huge potential that India holds in turning into a cashless economy going by the following data points. There are 104 crore debit/credit cards in circulation as of October 2016. As much as 88-90 per cent of debit card transactions are done at ATMs, with only 10-12 per cent of transactions occuring at point-of-sale (PoS) terminals.

> India barely has 2.1 lakh ATMs and 12 lakh PoS terminals to service such a huge population. It’s in this context that the Modi-led government’s directive to banks to add at least one million new PoS machines in the next three months should be welcomed.

> ‘Not a substitute for cash’
Our country has taken a huge step towards improvising digitisation in the economy. One would do well to pay heed to what Finance Minister Arun Jaitley said recently: “Digital transactions are a parallel mechanism, not a substitute, for cash transactions, and a cashless economy is actually a less-cash economy, as no economy can be fully cashless.”

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Post by shubham gupta Mon Dec 26, 2016 1:49 pm

Undoubtedly India is ready or somewhere force to move 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.
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. 
Moreover, Instead of wondering whether India is ready for a cashless economy, we much actually think of every measure possible to make India "cashless - ready", This is because its high time and India must get in the race and start functioning like the other developed and successful economies of the world. There are n number of benefits attached to paperless money like - increased transparency of transactions, improved economic growth and development of the country, reduced black money etc.
An organize for youngsters to teach furthermore help the Indian open to urban areas what's more rustic regions with move will a cashless economy. 
India’s demonetization might be those push the country necessities on move with advanced banking, Anyway it will take more deliberate administration exertions should push a long haul move. 
The awareness among people is rising and they are moving towards digital Economy. Changes can’t be done in a day but there is a ray of hope that Indian economy will be stronger in the days to come.

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Post by PGFA1658 Mon Dec 26, 2016 1:51 pm

The finance minister, in his budget speech, talked about the idea of making India a cashless society, with the aim of curbing the flow of black money. But what exactly is a cashless economy? It can be defined as a situation in which the flow of cash within an economy is non-existent and all transactions have to be through electronic channels such as direct debit, credit and debit cards, electronic clearing, payment systems such as Immediate Payment Service (IMPS), National Electronic Funds Transfer and Real Time Gross Settlement in India.

In the history of money, the arrival of banks brought in the need for paper currency. Banks had a limited supply of gold and silver and realized that their lending capacity was constrained by this. Hence, they started issuing paper notes in excess of their reserves. This was followed by the governments printing notes that were redeemable for gold and silver. But they printed notes in excess of their reserves. The problem was when people lost confidence in the paper notes and tried to redeem them for gold and silver, the system collapsed, for example, in Germany after the World War I.

This phenomenon of people losing faith in paper money has been repeated often. Whenever governments have printed more currency than reserves, the value of the currency has depreciated.

India 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 as well as cash being the only means available for many. Large and small transactions continue to be carried out in cash. Even those who can use electronic transfers, use cash. When A.T. Kearney surveyed consumer behaviour at malls, it found that close to 90% transactions happened by cash. E-tailers give the cash on delivery (COD) facility to expand consumer base. While the proportion of people opting for COD is decreasing, it still accounts for 60% of transactions. Even the luxury retail segment sees most transactions in cash.

While cash remains the preferred choice, there has been a big build-up in the payments infrastructure. There are over 1 million point of sale terminals for over 500 million debit and 20 million credit cards. Cash and cheque, which formed 94% of all transactions in 2003, may fall to 13% by the end of this decade.

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. We can estimate the upside potential from the fact that India has less than 40 million mobile banking users while each of the top three Chinese banks have in excess of 100 million.

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Post by Aman Chouhan Mon Dec 26, 2016 1:51 pm

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.
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.

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Post by siji abraham 1650 Mon Dec 26, 2016 1:55 pm

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. The foundation of which was laid by Aadhar, Jan Dhan Yojana and direct benefit transfer. The foundation that has already been laid. And universal payment interface is another brilliant that the government of India is working. I think, the move to digital 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.
India is struggling in terms of being digitally networked ready. A third of the Indian population is still illiterate and a similar share of youth is not enrolled in secondary education. Only 15 out of 100 households have access to the Internet and mobile broadband remains a privilege of the few, with only 5.5 subscriptions for every 100 people. This is in spite of the fact that affordability has long been one of the strengths of the Indian ecosystem, with the country ranking 8th this year in this area. A deep divide persists between well-connected metropolitan hubs and remote rural areas, where even the most basic infrastructure is insufficient. In 2015, the government launched the Digital India program, which aims to close this gap by fostering investment in digital infrastructure, improving digital literacy, and increasingly providing online services to citizens.
Here are the few points which says why India is not ready:-
• Till the moment 500 & 1000 rupee notes are demonetized, cash transactions constituted 85% among all the financial transactions in India.
• Even after the demonetization move, cash transactions are still the king.
• India has a huge population of digital illiterates. It’ll take a lot of time to transform everyone into digital literates.
• No country is a fully cashless economy yet. India is still a developing country, and needs a lot time to transform itself into cashless economy.
• Though no. of accounts have increased drastically after the demonetization move, 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.

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Post by ajmera911 Mon Dec 26, 2016 3:25 pm

The primary objective of the demonetisation was to push India towards a cashless/digital economy but moving to a cashless system will take some time. Following points can be considered to support this statement:-
 Currently, just about 2% of the economic transactions in India are cashless;
 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;
 Majority of ATMs are concentrated in metros and cities. For instance, Delhi has more ATMs than the entire state of Rajasthan;
 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;
 Poor penetration of banks and formal sector financial services in rural India;
 There are issues related to security, there have been several instances of debit and credit cards being hacked and large sums of money fraudulently withdrawn;
 Large population still not financial literate, they remain vulnerable to falling prey to such frauds easily.
Though the government is trying hard for this transition as:-
 The RBI and finance ministry have made Financial Literacy Centres (FLCs) to provide financial education;
 Issuing free RuPay debit card with all PMJDY accounts;
 Cutting down on service charge and other levies on debit/credit card transactions;
 Promoting e-payments, plastic transactions, cashless payments.

So keeping these points in mind I would like to conclude by saying that though this move was very much required since long, government has to go a long way in seeing successful results.


By- Ayush Ajmera (PGFA1602)

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Post by kaushalsoni139 Mon Dec 26, 2016 8:18 pm


"Is India ready to go for Digital Economy"
This debateable statement is very popular today, because everybody is talking about it, especially after demonetization step. But at present many people don’t know the exact meaning of digital economy. So Simply put Digital economy is an economy which functions primarily by means of digital technology, especially electronic transactions made using the Internet, plastic money ,ATMs ,etc,.
Now, coming to the topic. As we know the major step taken by our honourable PM Narendra Modi has created a great chaos in the country. This step tends us to us plastic money as a medium for payment during our transactions. BUT, in my opinion India is not ready toward digital economy concept because of many reasons.
The followings are the reasons behind my disagreement:-
1.)Few Cashless Transactions:-
The statistics are startling. Just about 2% of the volume of economic transactions in India are cashless.

2.)Less number of banks in rural areas:-
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.

3.)Less number of ATMs:-
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 guess what? A majority of ATMs are concentrated in metros and cities. For instance, Delhi has more ATMs than the entire state of Rajasthan.

4.)Security Issues in cashless transactions:-
There are issues of related to security. In an earlier issue, we questioned if banks and other financial institutions were technologically competent to tackle the security issues associated with the shift towards a digital economy.
Thus these are the reasons which I assume to be some of the hurdles which our country need to cross before going toward digital.

So finally I would like to conclude this by saying,
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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Post by Mubarak Mon Dec 26, 2016 9:26 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. 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. reduces transaction costs, new revenue streams….digital services pay for the physical hardware over time…. Free service gains market share, paid services support fee service. Both services getting cheaper to run every year and customers will have less risk with free use….Extra revenue with little extra revenue with little extra costs, online audience can have wider reach. And have worldwide subscription. Digital economy can provide new revenue streams.

EVEN BEFORE DEMONETISATION, there was plenty of excitement about the country’s digital payment prospects. In July this year, a joint report by Google India and Boston Consulting Group, titled ‘Digital Payments 2020’, said that by 2020 the size of this industry would be $500 billion, contributing to roughly 15 per cent of India’s Gross Domestic Product (GDP). Further, it projected the non-cash share of the consumer payment segment at 40 per cent that year, double the current figure.
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.
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. he 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. We can estimate the upside potential from the fact that India has less than 40 million mobile banking users while each of the top three Chinese banks have in excess of 100 million.

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Post by manish rajpal Tue Dec 27, 2016 3:53 pm

Demonetisation of high denomination currency notes of Rs 500 and Rs 1,000 has proved to be an experiment too risky for the government and too testing for the general public. 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. However, it seems the country is not ready for such an immediate shakeup.
DEA secretary Shaktikanta Das on Wednesday announced 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, cashless payments. It is, indeed, the future for the Indian economy.
The question, however, remains whether India is ready for such an overhaul of its cash-driven economy. RBI figures for July 2016 show that banks had issued 697.2 million debit cards and 25.9 million credit cards to customers after deducting withdrawn or cancelled cards.
The number is huge. However, cards on their own can’t turn the economy into a cashless one. Important to note that number of cards does not equal number of individuals holding those cards. Usually urban residents have multiple cards and the trend is seen now in rural areas as well. Further, cards are used for 3 primary purposes–withdrawing money from ATMs, making online payments and swiping for purchases or payments at point of sale (POS) terminals at merchant outlets like shops, restaurants, fuel pumps etc.
A report by Google India and Boston Consulting Group showed that last year around 75 per cent of transactions in India were cash-based while in developed countries like the US, Japan, France, Germany etc it was around 20-25 per cent.
Till the time this penetration for online payments doesn’t reach local stores, the transition will never be truly effective. For now it seems, the country is on the track to development but is rather hurriedly pushed into the reform.
Finally, financial security over the digital payment channels is imperative for pushing the cashless economy idea. When recently, data of lakhs of debit cards was rather easily stolen by attackers, the ability of Indian financial institutions to safeguard electronic currency and exchanges came into question. Also a big reason why people prefer cash as financial fraud has become too common and complicated for the common person.

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Post by prashantnavlani Tue Dec 27, 2016 7:17 pm

As per my view India is trying to move toward Digital Economy but is not fully ready for this due to following reason :-
1) maximum population are residing in rural areas which are not using Card payment and A report by Google India and Boston Consulting Group showed that last year around 75 per cent of transactions in India were cash-based while in developed countries like the US, Japan, France, Germany etc it was around 20-25 per cent.
2). Network connectivity is required for the digital payment so Government has to work upon this area because Digital Payment can't happen through 2G network. Companies are charging for 3G or 4G plan but are not providing speed accordingly.
3) Money is very precious. If we are trying for digitization so more security features are required, as we are seeing that hacking now a days are very common so no one want to take such risk.Finally, financial security over the digital payment channels is imperative for pushing the cashless economy idea. When recently, data of lakhs of debit cards was rather easily stolen by attackers, the ability of Indian financial institutions to safeguard electronic currency and exchanges came into question. Also a big reason why people prefer cash as financial fraud has become too common and complicated for the common person.
4) Retailer are not ready to accept digital payment because they want cash in hand to meet their day to day transaction.
5) RBI figures for July 2016 show that banks had issued 697.2 million debit cards and 25.9 million credit cards to customers after deducting withdrawn or cancelled cards.
The number is huge. However, cards on their own can’t turn the economy into a cashless one. Important to note that number of cards does not equal number of individuals holding those cards. Usually urban residents have multiple cards and the trend is seen now in rural areas as well. Further, cards are used for 3 primary purposes–withdrawing money from ATMs, making online payments and swiping for purchases or payments at point of sale (POS) terminals at merchant outlets like shops, restaurants, fuel pumps etc.
6) Proper education and awareness are required because most of people don't know how to do Digital Transaction and it is matter of Money.
So India is not ready but is trying hard to become Digital Economy like other developed Nations.

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Post by ashi gupta Tue Dec 27, 2016 9:00 pm

In my opinion, the major step of demonetization taken by prime minister Narendra Modi itself indicates the way India is moving towards cashless or digital economy. This step has forced millions of Indians to not just queue up in ATM's but also fall in line with the PM's government digital push. In a nation where most consumers are habitual of dealing in cash the currency switch has provided the big push to electronic transactions to improve transperancy and weed out black money. The government expects the move to payoff as cash starved consumer are taking a step to cross the psychological barrier of switching to digital transactions with which they feel uncomfortable till now. Though it will take some time to convert into purely digital economy but country has already started moving towards it.

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Post by SONU KUMAR Tue Dec 27, 2016 9:29 pm

If looking at all aspects, India already has moved towards digital economy, not completely but upto some extent. Almost all government organizations, public-private organizations have computerized, they are maintaining digital records. Even government has the digital records of each and every citizen through UID no., PAN no. etc. Various businesses are already going through online.

But in today’s context, this question is arising due to a scenario created by the government i.e. problem created due to demonetization. After 45 days of demonetization still there is a huge shortage of currency, people are still facing problems in withdrawing their own cash. Now the situation is government is forcing the country to move towards cashless transactions i.e. through plastic cards or online payments. It is accepted that huge amount can be transact, but what about very small amounts which transact very frequently. Our country is habitual of cash transactions due to frequent purchasing habits, frequent changing mind towards product. Our farmers and the people on very small amt. of daily wages, they know what the actual situation is and they are the most sufferer.

At present itself, the problem of poverty is not solved, people are forced to live under poverty, even  they are struggling for a square bread to survive. There are people who are still living without electricity (internet is far away of their thoughts). Without basic needs, job, money, electricity how can we think to be digital economy. Where 1/3 people of our country are illiterate, 1/2 people are not techno- friendly have no knowledge about technology. And without any preparation, any back up government forcing such people to do cashless transaction.

Hearing cashless economy can make a feel of being modern and technology advanced. But for the time being it is a mirage.

The another aspect is violating privacy of citizens. Due to cashless technology, you will be no more economical and financial independent. There will be an control of government on your decisions. Secondly, whenever you do transactions there will be a database definitely where your all information will be record. Government organisations, public- private organisations, each and every one will have the data of customers. And obviously corporate will be benefited by this data. Government can also misuse this data for their personal interest.

Another but one of the most important aspect is cyber security which is null in India. There are no effective laws and provisions.
Apart from such problems, trying to change our economy to digital economy can be a good step but there should be a proper and effective planning with considering the citizens mainly our poor people, our farmers.

This topic is too vast and cannot be completed in some phrases and words. So I focused on some of the points and issues of the digitalization and demonetization is concerned.

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Post by BHAVIKA AGARWAL Wed Dec 28, 2016 8:18 am

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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Post by kanishka mani Wed Dec 28, 2016 11:40 am

Yes India is ready to move towards the digital economy as we are witnessing the change in the economy. We are going towards the cashless economy which is a synonym of digital economy. Our government is also helping the people to move towards the digital economy by launching some effective plans for the using of plastic money like discount on payment by debit/credit card and by using other online payment sites like paytm, mobikwik, freecharge etc. Indian people is really rigid to accept any big change especially if it affects their day to day life but we are seeing that people are adopting it whole heatedly after the demonetization occur. People are really paying through all the mediums they have and they are not only depend on cash now. They are supporting PM Modi's also on the decision of demonetization and took it on a positive note.

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Post by prakhar.gupta Wed Dec 28, 2016 12:15 pm

The biggest problem with India 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. But this surprise demonetization also did something else: it pushed millions of new users onto the country’s digital economic grid by virtual fiat. 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. The Prime Minister's move to incentivize digital payments will offer a strong support to our ongoing efforts in helping the country leapfrog the cash generation to digital payment solutions.

Can India economy go cashless:-
Here are the reasons why!
NO. INDIA is not ready to for Digital Economy.
A large part of the population is still outside the banking net and not in a position to reduce its dependence on cash. According to a 2015 report by PricewaterhouseCoopers, India’s unbanked population was at 233 million. Even for people with access to banking, the ability to use their debit or credit card is limited because there are only about 1.46 million points of sale which accept payments through cards.
Second, about 90% of the workforce, which produces nearly half of the output in the country, works in the unorganized sector. It will not be easy for the informal sector to become cashless, and this part of the economy is likely to be affected the most because of the ongoing currency swap. Third, there is a general preference for cash transactions in India. Merchants prefer not to keep records in order to avoid paying taxes and buyers find cash payments more convenient. Although cashless transactions have gone up in recent times, a meaningful transition will depend on a number of things such as awareness, technological developments and government intervention. For instance, mobile wallets have seen notable traction, and it is possible that a large number of Indians will move straight from cash to mobile wallets. A study by Boston Consulting Group and Google in July noted that wallet users have already surpassed the number of mobile banking users and are three times the number of credit card users, but
presently people face difficulties in making electronic payments even in metro cities because of poor network as cashless system needs a strong online system to function. There is also a fear amongst people regarding online transactions. Losing internet connection while transaction is being processed, hacking or being cheated by fake online portals are fears, which need to be addressed. Small retailers in India do not have the facilities to move to online payment.
Second, as one of the biggest beneficiaries of this transition, banks and related service providers will have to constantly invest in technology in order to improve security and ease of transaction.

What India can do for going cashless:-
The government will have to create conditions—not necessarily by creating cash shortages—to push cashless transactions to a threshold level after which the network effect will take over. India may become a cashless economy in the foreseeable future, but it needs to reduce its unusually high dependence on cash to bring in much needed transparency and efficiency in the system. People will only shift when it’s easier, certain and safe to make cashless transactions. Going cashless needs to be motivated by providing tax benefits and perks.

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Post by maharwal.vartika Wed Dec 28, 2016 2:02 pm

India’s demonetization scheme was a unilateral initiative that was planned in secret — in a back room of Prime Minister Modi’s home, in fact — by a small group of insiders tied-in with the upper echelons of India’s government. The strategy was to instantly nullify all 500 and 1,000 rupee banknotes, the most common currency denominations in the country, and then eventually replace them with newly designed, more secure 500 and 2,000 rupee notes. This endeavor instantaneously became policy when the prime minister announced it via a surprise television address at 10:15 PM on November 8.

One of Modi’s main brands is that of a corruption fighter, and his demonetization initiative was rushed into effect in an attempt to catch the black market off guard — which could potentially lead to a big payday for the central bank if large amounts of illicit cash wasn’t redeemed. That plan flopped, as almost all of the recalled notes were officially accounted for one way or another.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

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Post by himanshu goyal Wed Dec 28, 2016 7:59 pm

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. 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....
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 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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Post by shubham.khurana Wed Dec 28, 2016 8:53 pm

Is India ready to adapt the digital economy is the most debatable talk of the town now-a-days. Post demonetization incident a search for reliable alternative of cash has started and cashless payments by cards, net-banking, Paytm present themselves as the most reliable method of payment after cash. But if we look at the infrastructure that is required to implement these methods is not readily available as of now in India. Most of the rural India hasn't got internet access which is required to carry out digital payments. Also rural Indians use cash as the most preferred mode of payment so there is a psychological barrier is there that is acting against promotion of cashless payments.
At present, digital payments account for 15 per cent of the $1.5 trillion worth of consumer spending in this country and we are pretty sure that the percentage is going to rise in near future due to the demonetization of currency which causes scarcity of hard cash with people which motivates them to pay digitally. so we can say that in long term India will adapt to the cashless structure of the economy but it doesn't seem possible in the near future.
But cashless economy has many benefits:-
-It brings transparency in the economic system.
-It can abolish the parallel economy because every transaction done through cashless mode is recorded.
-Fake currency can be removed from economic system by going cashless.
Our government is promoting cashless economy at a wider scale now but firstly it is necessary for govt. to develop infrastructure like internet facilities, point of sale machines etc. so that it can sustain cashless transactions.

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