Re: Is India ready to move towards Digital Economy?

by Ritika Fri Dec 23, 2016 12:33 am

A day after Prime Minister Narendra Modi announced that to curb black money in circulation Rs 500 and Rs 1,000 notes would no longer be recognised as legal tender, finance minister Arun Jaitley added a new gloss to the decision. He announced that this currency swap would “not merely nudge the economy in the direction of cashless economy but a significant push in that direction.”
Economic affairs secretary Shaktikanta Das echoed this in an interview, explaining that this move was part of a larger agenda to move India into a digital economy.
The scheme also promised to provide every new account holder with RuPay debit cards, with 195 million cards being issued so far. While the finance ministry must be given due credit, the Modi administration appears to have conflated outputs with outcomes.
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.
Speaking to the Wall Street Journal in May, Prime Minister Modi admitted that he was puzzled by the calls for ‘big-bang’ reforms since no expert could define the term for him.

As the shock waves of demonetisation roll across the Indian heartland, Modi’s administration would do well not to be blinded by the flash.

by Ritu kanojia Fri Dec 23, 2016 12:44 am

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. It would take a while, but infrastructure is in place.
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. Prime Minister Narendra Modi's focus on start-ups 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.
Paytm either settles the wallet balance with him in hard cash or directly credits his account, the way he wants it, he says. A similar voice was echoed by Mumbai based Uber driver Revana Siddhapaa who says that after the withdrawal of the Rs 500 and Rs 1,000 notes, he has seen a distinct switch over of people from cash to mobile wallet for ride payments.

by simran sharma Fri Dec 23, 2016 1:22 am

Will cash be dispossessed from the king’s throne and will digital win the battle finally? Perhaps yes, perhaps no, but bankers are hoping this latest initiative of the government not only weeds out black money but also encourages digital payments. I used to be only dealing in cash till date, but after Modiji’s announcement my customers did not have cash in hand to pay me for essential items. Instead of going for credit, I thought if I switch over to Paytm it will be a far better option for me as well as for my customers. So far there was no perceived cost of cash which has now changed which is making people look at alternatives. Earlier the banks were bearing the cost, now it is being borne by people who do business in cash, so one big hurdle towards cashless has moved away. While intention to evade, taxes is a habitual issue which will not change overnight, awareness, connectivity and internet infrastructure have also been major hurdles for digital payments. While urban centres mostly enjoy high speed internet connectivity, even semi urban areas are deprived of a stable net connection. Therefore, even though India has more than 200 million smartphones, it is still some time away for rural India to seamlessly transact through mobile phones. Many feel that the major issue that is stopping people from going digital is with the Indian mindset. While tendency of merchants to never reveal their actual income to avoid taxes is one, people are also used to paying in cash so much so that for them to shift to new mode of payments requires a major change in habit which will need time.

by alka yadav Fri Dec 23, 2016 3:49 pm

Yes India is ready to move towards digital economy and the reason for this is demonetization the step which is taken by PM Narendra Modi. This is the massive step which help India to move towards digital medium as we are not having much cash but have the same as before so to fulfill those needs we need money but we don't have cash. This is the reason we have to use either plastic money or digital medium like paytm,wallet etc. Now there are certain discounts are also there like if we pay through digital medium at petrol pumps or book railway tickets.
So these offers attract the population to move towards the digital medium.As there is more and more use of digital medium or plastic money it will help to improve the Indian economy.

by Garvit Kumar Shah Fri Dec 23, 2016 4:21 pm

THESE ARE CASHLESS days in India. Soon after the Union Government withdrew high-denomination notes in early November, the debate on India moving towards a cashless economy—or more plausibly, a less- cash economy—has gathered steam. In the days immediately after the decision, many urban residents switched to digital payments online due to sheer necessity, as notes of Rs 100 and less suddenly became scarce. ‘Scarcity’, however, is the wrong word to describe what happened. The Rs100 note has over the last 15 years been edged out by Rs 500 and Rs 1,000 notes, so when the latter were withdrawn, it resulted in a shock of sorts.
The committee has its task cut out. If India is to increase the number of those who steadily give up cash in favour of digital payments, it needs to address three issues. One, a large number of citizens, especially at lower rungs of the income scale, need to be equipped with devices through which such transactions can be done. The device of choice: a mobile phone, preferably a smartphone. On this front, the progress is somewhat satisfactory. Two, the other side of this exercise involves bringing an ever growing number of persons within the ambit of formal banking, which in turn calls for designing and implementing a user-friendly system of cashless transactions, a formidable challenge. Unbelievable as it may sound after nearly 70 years of Independence, the task of getting as many Indians as possible to use banks is just beginning. Finally, the toughest part of the digital economy triangle is that of changing the habits of a population that has been used to cash for more than a millennium. This is perhaps the toughest part of the transformation sought.
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.

by Kiran Moolrajani Fri Dec 23, 2016 4:22 pm

Yes, India is all set to welcome the digitization after the demonetization came into place as now everybody is focusing towards the cashless economy and looking forward to this new arena.
Digital economy is very beneficial to the people of India as now instead of carrying currency in pocket a person having an android mobile phone with the e-wallets is quite easy and handy.
The advent towards making the economy cashless is put forward by our honorable Prime Minister Mr. Narendra Modi which will include growth of several areas such as manufacturing, employment sector, electronic services, products, and lots more. It will aim to bridge the gap between government initiatives and the citizens of India.

The development in the hardware sector has contributed significantly to the India’s GDP. IT firms are supporting transparent and efficient governance which will act as bridge for the rich-poor divide.
They can enhance the reach of Government and act as a medium that helps in understanding the people’s needs, ambition and problems of people. It is just similar to adding new inspiration and strength.

The government’s collaboration with the IT companies will bring greater results that can be expected for the next generation.

by shubhrv Fri Dec 23, 2016 4:35 pm

The Digital India initiative aims to transform India into a digitally empowered society and knowledge economy. It aims to connect entire India digitally in the span of 4 years i.e. till 2018-19.

It is a very good and required initiative by government. In today's world digitization must in every sector.It will save very precious time and its accuracy is also more.In India almost 60 to 70 percent of different sectors are digitized, the basic digitization mainly includes wireless communication i.e mobile connectivity.

Digitization also ensures that the public goods and services are reaching people effectively. Whether it is banking, railways or even Public distribution system, it makes their delivery faster and easier to keep track with.

Unlike the times when the people had to visit the government offices multiple times to get their work done, people can now do almost everything online, to apply for a PAN card, passport and to book a railway ticket or pay bills they no longer need to stand in long queues.

There is also an online grievance system for almost every service and therefore people's problems are now better attended because everything is now recorded and tracked. We have even seen People directly tweet the grievance to the concerned minister and getting it resolved. So with this another value of democracy, service for the people is effectively implemented.

Thus India is ready for Digitization.

by kshitiz agrawal Fri Dec 23, 2016 5:12 pm

Digital economy refers to an economy that is based on digital computing technologies. The digital economy is also known as the Internet Economy, the New Economy, or Web Economy. Increasingly, the "digital economy" is intertwined with the traditional economy making a clear delineation harder.

Now India is not in a position to move towards cashless/digital economy because some of the factors which are stopping India to move towards digital economy in rural areas people afraid to use digital mode of payments as they are not aware of using digital technologies, Cyber crimes rate, Digital payments frauds, Misuse of personal information of users, Hacking activities, Identity theft frauds, First users dumped by others,Lack of internet connectivity especially in rural and urban areas, no education regarding digital technologies. Uneducated people, they don't know how to use all these digital payment modes whether it is PAYTM, NEFT, RTGS 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.

by Komal Khanna PGFA1623 Fri Dec 23, 2016 5:53 pm

Cashless, the word that was not thought by many of us 2 months back. This is now become important to us because we don't have cash in our hand, it's in our banks. But the question is will the people of our country accept this system or not? Are they happy with this or not?
Discounts are in, but is India ready to go cashless?
India is continuing to do it's business in this "tangi" (shortage) also, but it is difficult. We are moving towards it but I don't know that whether many of us will accept it or not. This was done forcibly but after some years the maximum number of people will start using digital payment. We cannot say whether we will move towards it or not but yes we are trying to accept it and making it in our daily life. We all are used to buy and sell through cash, it has become a habit. The shortcoming must be met first then India can move towards digital economy.
But if we go in past, when mobile phones were launched we thought that village people will not accept it, this will not work in this country. Now, we can see that everybody has phone. So, this system of cashless is new but it will also become a habit and everybody will start using this. And, this will be good for our country.

by nikita0831 Fri Dec 23, 2016 6:15 pm

Yes in my opinion India is moving towards digital economy because after historic event of demonetization, Indian government is focusing on cashless transaction . This step was taken by the government as this will reduce corruption in the country and will also increase value of money. It is good for the country as it will increase transparency and decrease black money. For being a cashless economy it is necessary to move towards digitalization.
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. Although the payment mechanism is becoming modernised , some people are still facing problems , but there is no doubt that this is the right direction to move. 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.
So yes, I can say that India is ready to move towards Digital Economy.

by kirti sharma Fri Dec 23, 2016 7:14 pm

Yes.. it is very true that India is ready to move towards Digital economy and its main reason is DEMONETISATION. "The sooner the economy moves to a digital economy there will be less wastage, more productivity, more evolution and less of a black economy," . Although if we talk about today's time then it will take a huge time to make India a cashless economy because In my view, digital India is a way distant dream...particularly for rural India. There have been several instances of debit and credit cards being hacked and large sums of money fraudulently withdrawn from the accounts of hapless account holders. And with a large population still not financial literate, they remain gullible to falling prey to such frauds easily. 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.
Many of the new factors like Paytm ,oxygen wallets has been started but who knows that how many people know how to use these apps otherwise if all these factors gets solved than we can say that yes India is moving towards digital economy.
if we move towards digital economy then it will also helps in eliminating corruption free environment. It is a revolutionary step that will transform India . It will propel India on the path of becoming a developed countries in the years to come.

by Simran Pipariya Fri Dec 23, 2016 9:25 pm

Yes India is ready to move towards Digital Economy. The demonetisation move by the Modi 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.
The sooner India will move to digital economy there will be low wastage,there will be high productivity, evolution will be more and less black money. But at the same time there are many people who don’t want to switch to digital economy. In starting there will be a lot of troubles and pain but sooner it will rise the GDP of our economy.
With the Pradhan Mantri Jan-Dhan Yojana (PMJDY) scheme, now the cards are with people even in the rural areas and even in semi-urban areas. So, if a stable system is leveraged, it is good and as we see, the volume is growing. But at the same time, I would say that to cover, to make non-cash payment universal, we have to leverage the mobile phones, both smartphones and feature phones.
Advantages of Digital Economy:
1. It will help in decreasing crime if applied on whole.

2. It will help in getting things done easily.

3. Using a payment card gives convenience and security than making cash withdrawal and moving to where to make purchase.

Disadvantages of Digital Econmoy:
1. Impractical if you move to another country
2. Cards get expired and then you have to buy new one which takes long time.
3. Without cash there would be no instant payments for goods and services
4. Disadvantages of a cashless society consist of privacy issues and computer hackers.
So, I can say India is moving slowly towards Digital Economy.

by sonali gupta Fri Dec 23, 2016 10:33 pm

Yes, India is moving towards Digital Economy because of Demonetization. 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.

by mayank khatri Fri Dec 23, 2016 10:37 pm

Yes, India ready to move towards Digital Economy.
Digital India’ is a vision, which is based on three key areas The first is to make various utilities available to the citizens through cutting-edge digital infrastructure. It will enable delivery of services like banking and access to service centres at the doorstep of citizens with the assistance of high speed internet.
The second area of vision will be the focus on governance and services. This digital movement will bring everything in the palms of people across departments and places. It will enable providing services to people in real time, cutting across every hindrance. It will also enhance the usage of cloud services and enable citizens to receive their due just from these services. Furthering the benefits, it will ease the procedures for starting businesses in India and even the financial transactions will become effortless as people wouldn’t have to set foot outside their houses
The third and the foremost vision would be to empower citizens digitally. The digital resources, like documents etc. will be easily available on the cloud, making access to information easier and faster. This will consequently lead to a digital revolution in the country. Further, the services would be friendlier as they would be available in native languages, making their penetration comprehensible and vast.
By the year 2019, 2.5 lakh villages will have broadband connection along with the added feature of phone connectivity. The imports of the country will turn zero as India will have a staggering 400, 000 Public Internet Access Points. Not only that, over 2.5 lakh educational institutions including schools and universities will have Wi-Fi facility.
This all are the reason which says India can be a digital economy.

by Prateek Poddar Fri Dec 23, 2016 11:28 pm

At every second India is moving towards digital economy, But it can’t reach to the hundred percent as the developed countries also have only fifty to sixty percent of digital transaction of their personal expenditure whereas India only with five percent.
Tech support is not robust enough to support even the existing number of cards - some 26 crore credit cards and some 69.7 crore debit cards. The country suffered a massive debit card breach in October 2016 that ended up affecting 3.2 crore debit cards across several banks, only showed up the vulnerabilities of our banking networks.
Some experts are of the view that the government's demonetization move will push more people and merchants to consider digital options. The government's initiative to scrutinize large cash transactions and demand PAN cards and IDs will keep on discouraging cash transactions.
It takes time to shift to digital platforms. Typically a period of three to four years with sustained government policies.

by Rishabh verma Fri Dec 23, 2016 11:40 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.
This is a massive step (towards fighting blackmoney and digital economy). The foundation of which was laid by Aadhar, Jan Dhan Yojana and direct benefit transfer.The sooner the economy moves to a digital economy there will be less wastage, more productivity, more evolution and less of a black economy.
Its moving towards a cash less and digital economy but it would take a while, but infrastructure is in place. 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 and yes from my point of view, India is ready to move towards digital economy.

by BHARAT JAIN Sat Dec 24, 2016 12:08 am

India is a developing country and people are getting aware of the things i.e changing trends (but not fully), they are retaining their trust towards the laws and order of the country and making themselves comfortable regarding the changing trends in the technology.

Recently, due to demonetization, people of our country are facing lots of trouble because many amongst them do not know how to use Debit/Credit cards and not aware about the online transaction facility. It’s not easy to teach them in a single day and built their trust. It needs a couple of years.

I am not saying that the move towards a Digital Economy has created an adverse impact on the Indian economy. Moving towards Digitalization will create a good impact on the Indian economy because we will be moving towards the cashless society and due to this level of black money decreases and due to that there will be a reduction in the level of corruption and because of this our economy growth will increase.

What I think is that it is not the right time to move towards the Digital Economy because only 2% of the whole population doing the cashless transaction, which is low.

First of all, we will have to aware the people, teach them, educate them, so that they can build their trust towards the Digital System and going to use it instead of using hard cash. Make them comfortable with the digital payments gateways.

We can say that because of the impact of demonetization some people started using digital gateways.

But according to the present scenario, it is not worthy to move towards the digital economy.

Things need time to change!

by Diksha Batish Sat Dec 24, 2016 12:38 am

Digitization of India will not only increase the efficiency of the government and public sector but also bring about huge democratization of the economy.Moreover, a digital economy can lead to more trade, better capital use, greater competition and can promote efficiency and innovation as well as provide an inclusive platform for economic participation. India has already taken its call. Digital India is a great initiative by our prime minister to bring good governance to citizens through synchronized and co-ordinate engagement of the entire Government. While government is trying to digitalize and connect all areas in the country to digitally empower the people, it has its own set of challenges:

• India’s foremost challenge is to provide a broad base of digital access. Millions of people still don’t have a bank account, internet or infrastructure to understand and use online payment methods etc.
• IT literacy: This concept is a big no-no for those who are not techno savvy even though they are literate. On top of it, it is even difficult for people in the rural areas to adopt this change due to lack of training.
• Financial security over the digital payment channels is also a hurdle for imbibing digital transactions and cashless economy in the country.
• All people do not trust digital transactions; The mindset of many refrain them from transacting online.
• Adapting to technological change is not an easy way for most of the people.

However, there exists a “digital and cashless village”, Akodara near Ahmedabad. Most of the people living there buy everything from wheat flour to potato chips through mobile banking and have little to worry about when it comes to the demonetization. In a digitized economy where more number of connections will become a reality, success will come not just by changing business models and innovating new ways to generate revenue, but also with a change in mindset. The government needs to have a thoughtful planning and phased implementation. India’s demonetization is probably a push the country needs to move to digital banking, but it will take more concerted government efforts to promote a long-term transition.

by Mohini Choudhary Sat Dec 24, 2016 10:13 am

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. But Indian Government is working towards increasing the share of cashless transactions, which is a good thing for any economy. While addressing one of the function Minister of State for Home Kiren Rijiju asked NDRF(National Disaster Response Force) personnel to adopt cashless transactions and utilise their vast reach across all corners of the country to spread the message of digital payments. He also said though it is difficult to move to digital payments initially but once it is started, one can easily adapt to the cashless mode of payments. So according to me India is not completely ready for this drastic shift.

by pitamber Sat Dec 24, 2016 1:22 pm

The advent towards making the economy cashless is put forward by our honorable Prime Minister Mr. Narendra Modi which will include growth of several areas such as manufacturing, employment sector, electronic services, products, and lots more.
It will aim to bridge the gap between government initiatives and the citizens of India.
The statistics are startling. Just about 2% of the volume of economic transactions in India are cashless. so this is of a great concern for India whether there are ableto cope with it or not . young generation is educated and knows how to do digital transactions but what about those who are not educated and does not know how to do digital transactions so it will be very difficult for them to implement this.
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.

by SHWETA KHANDAL Sat Dec 24, 2016 3:22 pm

The demonetization move by the Indian government would reduce the role of black money and will lead the country towards a digital economy,as they are not comfortable in moving towards a cashless economy.The development in the hardware sector has contributed significantly to the India's GDP.IT firms are supporting transparent and efficient governance which will act as bridge for the rich poor divide.They can enhance the reach of government and act as a medium that helps in understanding the people's needs,ambition and problems of people.It is just similar to adding new inspirations and strength.
The immediate impact of demonetization is visible in the national capital where even small traders took to digital modes of payment including e-wallets.Tea sellers,vegetable vendors and neighborhood grocery stores started accepting money through e-wallets after the government banned Rs 500 and Rs 1000 notes,sweeping away 86 percent of India's total currency in circulation.
Although the payment mechanism is becoming modernized,some people are still facing problems,but there is no doubt that this is the right direction to move.A digital economy can lead to more trade,better capital use and greater competition.The digital economy promotes efficiency,competition,and trade and is thus capable of generating more wealth.

by NehaKumari Sat Dec 24, 2016 6:33 pm

After demonetisation our Indian economy is now suffering a cashless economy.Because of less cash people are moving towards digital economy where they can transact easily by using technologies.By less cash it clearly defines transparency,less corruption and less black money.
According to me,India is not moving towards digital economy particularly from rural side.From urban point of view,they are moving towards digital economy but as a whole in our country its not moving.Currently there are 7.8 branches of banks per one lakh Indians which clearly signifies that a major part of rural Indians go to banks,depends on cash and informal credit system.At the same time a large number of ATMs are available in metroes and cities.
In India many people are not ready to pay online because of lack of education and awareness towards it.At the same time many of them are using paytm,mobiwik,freecharge etc for payment.So somehow they are moving towards digital economy but not to that much extent.May be our prime minister ambition of cashless will become dream.But if this dream becomes true then our country will be free from black money and corruption.

by prachi gupta Sat Dec 24, 2016 7:35 pm

With the current step of demonetization, it has definitely forced the country to move towards cashless economy. It has pushed the people to start using digital payments .People are now making account on e-wallets rapidly and doing transactions via credit or debit cards. Also these wallet companies are expanding their features apart from recharge and bill payments.

• The government is trying its level post to ease the situation and has done well setup planning before moving towards the step.
• National institute for transforming india (NITI) with CEO as Amitabh kant is playing great role in looking forward the issue.
• Launch of Aadhar by UIDAI and national payments corporation of India is trying to promote digital payments, conduct transactions online.
• Because of this a rapid surge in digital payment is seen by the country and also people are trying to shift their base towards cashless economy.

Though it will take some time to settle down for this.

• Because in a country like India where people have a mindset of dealing mostly in cash it would be difficult to shift towards digital payments suddenly.
• Electronic literacy Also in rural areas people have least knowledge of what credit , debit cards and Paytm is all about so they would take time in using all this.
• Also many people still don’t have bank accounts, there is lack of proper infrastructure . lack of PoS terminals so all this are creating a hurdle of India moving towards digital economy.
• Rising cyber crime is another threat for people moving towards digital economy. Because not many aspects are considered taking care of this threat.

by abhik Sat Dec 24, 2016 9:42 pm

This is a very good step taken by our own PM to take India to a cashless economy state.This is a massive step towards fighting blackmoney and 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.

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.

Modi’s demonetization initiative has been a boon for India’s e-payment providers. Paytm reported a three-times surge in new users -- tacking on over 14 million new accounts in November alone. While Oxigen Wallet’s daily average users increased by 167% since demonetization began.

by Shubham Mathur Sat Dec 24, 2016 11:15 pm

zaid0407 wrote: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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