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ECONOMY IN
INDIA
SIMRAN PRAKASH
2 ‘P’
1214-17-403-027
TABLE OF CONTENTS
1 Introduction 1-3
1.1 Introduction 2
2.1 Meaning 5
2.2 Definition 5
2.3 Importance 5
5 Bibliography 28
CHAPTER – I
INTRODUCTION
.1
1.1 INTRODUCTION
CASHLESS ECONOMY
A cashless society describes the economic state whereby the financial transactions are
not conducted with the money in the form of physical bank notes or coins but rather
through the transfer of digital information between transacting parties. Cashless
society have existed from the time when human society came into existence, based on
barter and other methods of exchange, and cashless transactions have also become
possible in modern times using digital currencies such as bit coin . However this
article focuses and discuses on ‘cashless society’ in a sense of a move towards and
implications of a society where cash is replaced by its digital equivalent in other
words legal tender (money) exists, is recorded, and is exchanged only in electronic
digital form.
Such a concept, has been discussed widely particularly because the world is
experiencing a rapid and increasing use of digital methods of recording, managing
and exchange of money in commerce, investment and daily life in many parts of the
world.
Digital India is the flagship programme of the government of India. It was launched
on 1st July 2015 by Prime Minister Narendra Modi , with a vision to transform India
into a digitally empowered society and knowledge economy. ‘ Faceless, Paperless,
Cashless’ is one of the professed roles of digital India. Major progress towards this
goal was made in late 2016, When the government took steps to demonetize the
country. Now even small retailers and shop owners are using cashless models like
Patym , for transactions.
.3
CHAPTER - II
REVIEW OF LITERATURE
.4
2.1 MEANING
CASHLESS ECONOMY
Cashless economy is a system where any type of money transactions are done through
digital means like debit cards, credit cards, electronic fund transfer, mobile payments,
internet banking, mobile wallets and other newly evolved payment channels, this will
leave very little scope for flow of hard cash in economy.
There is a rule called Pareto 80-20; which says 80 per cent of problem comes from
20 per cent of causes, seems like government is also going by this rule. By just
making the economy cashless nation’s many problems like black money, corruption
high taxes, unemployment can be solved.
2.2 DEFFINITION
2.3 IMPORTANCE
.5
Cost Reduction
Cashless system brings down the cost associated, with printing, storing and
transporting of cash.
Risk Reduction
The risk of money getting stolen or lost is minimal. Even if a card is stolen or
lost it is to block a credit or debit card or a mobile wallet remotely.
Convenient
The ease of conducting financial transactions is probably is the biggest
motivator to go digital. With the advent of digital modes, one can avoid queue
for ATM’s transact 24*7 and save time.
Tracking Spends
Spending done via mobile or computer applications can be easily tracked with
a simple click. This allows users to keep a track on their spending and
manage their spending effectively.
Increase In Tax Base
Traders, small business shopkeepers, and consumers regularly use cash as a
means to avoid paying service tax, sales tax, etc. However in cashless
economy where all transactions will be done through organised channel,
through banks and financial institutions, they can be monitored by the
government and proper actions will be taken against evaders. This will result
in more transparent transactions which in turn lead to fall in corruption in
economy of the country.
Containment Of Parallel Economy
In a cashless economy it is easier to track the black money and illicit
transactions unlike cash based economy in which money does not come into
banking system. In case of digital transactions it is easy to track and monitor
suspicious transactions as all the records are available with banks.
Financial Inclusion
At, present India’s low-income households credit through informal system,
through relatives or private lenders. Forcing them to shift to cashless payment
platforms instantly formalises this world of od informality and include them in
formal economy.
Discounts
A lot of e-commerce websites offer huge incentives in term of discounts, cash
back, loyalty points to the customers for making digital transactions for
shopping online.
.6
More than 60% of Indian population belongs to rural religion. Almost a quarter of the
rural populace doesn’t have mobile phones and a large percentage of them are
computer illiterate. They are not comfortable for using mobile phones or
computers for transactions and rely on other people for help. This sometimes leads
to misuse of accounts and siphoning of funds so majority of rural mass prefer cash
over digital modes.
About 90% of Indian labour market is informal. Majority being employed in
agriculture and manufacturing sector where daily wages is prevalent. Under such
circumstances the informal market is heavily cash dependent.
India is a country were 90% of transactions are paid in cash because cash
facilitates making transactions anonymous, helping conceal activities from the
government in a way that might help agents avoid laws, regulations and taxes.
Security is another big concern regarding cashless transactions. The Indian Computer
Emergency Response Team has reported a surge in number of incidents till
October 2016 with close to 39,730 security incidents .
Though several companies have come up with inexpensive smart phones still they
are not affordable to most of the people on our country. Unless Indian
government provides necessary subsidy or affordable solutions cashless economy
would be farfetched dream.
Digital India suffers from the threat of thefts and hacking of digital money
instruments. The ATM cards, debit/credit cards, Net banking solutions and even the
transactions websites of the financial institutions are hacked by the mischievous
who withdraw money by making clones and changing passwords. This has to be
taken care of before proceeding digital India mission.
Saravjeet Singh (2016), in his study the need for cashless society is because it
is much more risky to conduct criminal transactions or avoid proper payment
of due taxes in a cashless society such violations are likely to be greatly
reduced, It eliminates the need to carry cash or plastic. Digital payments can
be made with a tap or wave of a smart phone depending on the technology
used. It would make it easier to loan or borrow money as with digital
payments lending and borrowing can be reduced.
Harsh Gupta (2017), in his study Reducing India’s economy’s dependence on
cash is desirable for a variety of reasons. India has one of the highest cash to
gross domestic product ratios in the word, and lubricating economic activity
paper has a cost. According to a 2014 study by Tufts University, The cost of cash
in India, cash operations cost the Reserve bank of India (RBI) and commercial
banks about 21000 crore annually.
Ranvir jaiswal (2018), in his study, The asset quality has been the lowest for
Indian banks, Public sector banks have taken the biggest hit the high exposure
of public sector banks like SBI to corporate loans is one of the reasons for
stress of the asset quality . The gross of the net performing assets rose sharply
from 2% from 2007-8 to 4% this is major worry for banks.
.7
CHAPTER - III
DATA ANALYSIS
AND
INTERPRETATION
.8
1. Are you aware of digital India?
yes
no
ANALYSIS-
INTERPRETATION-
.9
2.Do you think making India cashless will uplift the standard of living?
yes
no
The above pie chart shows that ‘making India cashless’ will uplift the standard of
living or not?
ANALYSIS-
According to the pie chart 22 out of 30 agree that making India cashless will
uplift the standard of living
According to the pie chart 8 out of 30 disagree that making India cashless will
uplift the standard of living
INETRPRETATION-
73 out of 100 (i.e. 73%) people think making India cashless will uplift the
standard of living
27 out of 100 (i.e. 27%) people think making India cashless will not be able to
uplift the standard of living.
.10
3. Do you want to live in a digitalized city?
YES
NO
INDIFFERENCE
The above pie chart shows the number and percentage of respondents who want to
live in a digitalized city, who don’t want to live in a digitalized city and
indifference?
ANALYSIS
INTERPRETATION
The above pie chart shows the percentage of respondents who want to live in a
digitalized city, who don’t want to live in a digitalized city and indifference?
.11
4.Do you think India is completely ready for cashless economy?
TOTAL 30 100
YES
NO
The above pie chart shows that India is completely ready for cashless economy or
not?
ANALYSIS-
According to the pie chart 5 out of 30 say yes, that India is completely ready
for cashless economy
25 out of 30 say no, that India is not ready for cashless economy
INTERPRETATION
17 out of 100 (i.e. 17%) of respondents think that India is completely ready for
cashless economy
83 out of 100 (i.e. 83%) of respondents think that India is completely ready for
cashless economy.
.12
5.According to you what is the most important aspect to convert India digitally?
literacy to rural
people
digital education
both
The above pie chart shows the number and percentage of the most important aspect
to convert India digitally
ANALYSIS
According to the pie chart 4 out of 30 say yes literacy to rural people is the
most important aspect to convert India digitally
2 out of 30 say digital education is the most important aspect to convert India
digitally
24 out of 30 say, both are equally the most important aspect to convert India
digitally.
INETRPRETATION
yes
no
The above pie chart shows the number and percentage of rural people will be able
to adopt the digital change in our country or no?
ANALYSIS-
According to the pie chart 16 out of 30 say yes, that rural people will be
able to adopt the digital change in our country.
14 out of 30 say no, that rural people will not be able to adopt the digital
change in our country.
INTERPRETATION
53 out of 100 (i.e. 53%) of respondents, rural people can be able to adopt to
the digital change in our country
47 out of 100 (i.e. 47%) of respondents, rural people will not be able to adopt
the digital change in our country.
.13
7.According to you which sector will get developed most after digitalization in India?
Agricultural
Sector
Industrial Sector
Service Sector
All
The above pie chart shows the number and percentage of which sector will get
developed most after digitalization in India?
ANALYSIS-
According to the pie chart 4 out of 30 agree that Agriculture Sector will get
more developed
3 out of 30 agree that Industrial sector will get more developed
10 out of 30 say that service sector may get developed more
13 out of 30 say all the sectors may equally get developed after digitalization
in India.
.14
INTERPRETATION
14 out of 100 (i.e. 14%) of respondents, Agriculture sector will get most
developed after digitalization in India.
10 out of 100 (i.e. 10%) of respondents, Industrial sector will get most
developed after digitalization in India.
33 out of 100 (i.e. 33%) of respondents, Service sector will get most developed
after digitalization in India.
43 out of 100 (i.e. 43%) of respondents, All will equally get developed after
digitalization in India.
8. After digitalization which area will become more convenient to you as compare to
the current services?
Transport reservation
Shopping
The above pie chart shows the number and percentage of which area will become
more convenient compare to the current services?
.15
ANALYSIS
INTERPRETATION
9.Do you believe the Government should take more to set up a cashless payment
infrastructure?
.16
yes
no
The above pie chart shows the number and percentage of Government should take
more initiative or not to set up cashless payment infrastructure?
ANALYSIS
INTERPRETATION
80 out of 100 (i.e. 24%) of respondents, agree that the Government should
take up the initiative.
20 out of 100 (i.e. 20%) of respondents, disagree that the Government shouldn’t
take initiative.
10.Do you believe minimising the use of printed bank notes will have the positive
impact on environment and help reduce crime?
.17
yes
no
The above pie chart shows the number and percentage of respondents, minimising the
use of printed notes will have a positive impact on the environment and help reduce
the crime or no?
ANALYSIS
According to 16 out of 30 say Yes that minimising the use of printed bank
notes will have the positive impact on the environment and help reduce the
crime
According to 14 out of 30 say No that minimising the use of printed bank
notes will have the positive impact on the environment and help reduce the
crime
INTERPRETATION
.18
11. Which mobile payment apps do you use?
paytm
mobikwik
oxygen wallet
all
The above pie chart shows the number and percentage of mobile payment app used by
the respondent?
ANALYSIS
INTERPRETATION
12.Do you think cashless transactions are more convenient than cash transactions in
daily life?
The above pie chart shows the number and percentage of respondents, whether
cashless transactions are more convenient than cash transactions in daily life or no?
ANALYSIS
INTERPRETATION
63 out of 100 (i.e. 63%) of respondents, think that cashless transactions are more
convenient in daily life.
37 out of 100 (i.e. 37%) of respondents, think that cash transactions are more
convenient in daily life.
.20
YES
NO
The above pie chart shows the number and percentage of respondents willing to
switch to cashless transactions or not?
ANALYSIS
INTERPRETATION
.21
14. What worries more to switch into cashless transactions?
Criteria Number of % of
respondents respondents
Security applications 4 14
Internet connection 5 17
Hackers activity 12 40
Nil
All of the above 9 30
Total 30 100
security appplications
inetrnet connection
hackers activity
The above pie chart shows the number and percentage, of what worries the
respondents to switch into cashless transactions?
ANALYSIS
INETRPRETATION
.22
According to 40 out of 100 (i.e. 40%) Hackers Activity worries the respondents to
switch into cashless transactions.
According to 30 out of 100 (i.e. 30%) All equally worries the respondent to
switch into cashless transactions.
.23
CHAPTER - IV
.24
4.1 FINDINGS
5.Literacy to every other rural people and providing digital education is very
important to convert India digitally
6.Rural people can ne able to adopt the digital changes only if they will be
given proper guidance of digital literacy and knowledge.
8.After digitalization all the areas will become more convenient compare to the
current services.
10.Minimising the use of printed notes will have a positive impact on the
environment and help reduce the crime.
14. Hackers activity worries the most to switch into cashless transactions.
.25
4.2 SUGGESTIONS
4.2 CONCLUSION
.26
Reducing Indian’s economy dependence on cash is desirable for a variety of
reasons. India has one of the highest cash to gross domestic ratios in the
word and lubricating economic activity with paper has costs.
.27
CHAPETR - V
BIBLIOGRAPHY
.28
5. BIBLIOGRAPHY
Cashlessindia.gov.in
Cashless.gov.in/digital-payment-methods.html
businesstoday.in/opinion
http://www.livemint.com/Opinion/uzv0.html
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