World Economy

Modi Aiming for Cashless Economy

Modi Aiming for Cashless EconomyModi Aiming for Cashless Economy

Union Minister Venkaiah Naidu on Wednesday said that government would not roll back the demonetization move as Prime Minister Narendra Modi is aiming for a cashless economy.

“The government is committed to fight against corruption. This is also a fight against those who have not declared their black money. Modi gave them time to declare their assets, but they didn’t. The fight against them will continue,” PTI quoted Naidu as saying.

“The prime minister first tried to bring back black money from foreign countries, now he is trying to unearth black money from within the country. Modi aims at a cashless economy where you don’t have to pay anything to anyone in person” added Naidu. The minister also said that Modi will soon bring Jan Dhan, Aadhar and Mobile. “There won’t be a need to meet people after that,” said Naidu.

Hitting out at the opposition, Naidu said: “I am surprised at the manner in which the opposition is coming together, but what is their strength? The country is with us.”

“Modi is not the kind of person who will roll back the demonetization policy,” added Naidu.

Meanwhile, a report by Google India and Boston Consulting Group showed that last year around 75% of transactions in India were cash-based while in developed countries like the US, Japan, France, Germany etc it was around 20-25%. Due to demonetization business for mobile or e-wallet companies has boosted by up to 4 times and the figures are keeping up.

“Much of the cash transactions in the country are small exchanges for goods or services and the penetration of point of sale terminals is not enough. 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. So we need a large scale penetration of digital services and PoS terminals to facilitate digital transactions in small towns, rural areas, untapped markets in urban India.”

There are at least 1.45 million PoS terminals installed by banks across the country with over 200,000 ATMs. But, the retail locations for PoS transactions is nowhere near to the over the counter cash transactions.

Spending habits also say a lot. In July this year, 881 million transactions were made using debit cards at ATMs and PoS terminals. Out of these, 92% were cash withdrawals from ATMs. The principal purpose for cards in Indian setup is thus a means to withdraw cash.

Add new comment

Read our comment policy before posting your viewpoints