On 27 November, 2016, during an election rally in Kushinagar, Uttar Pradesh, Prime Minister Narendra Modi urged all Indians to get familiar and make others familiar with cashless transactions.
To bolster the intended move,in between his radio programme ,Mann Ki Baat (What’s on my mind), he said,“Learn how this digital economy works. Learn the different ways you can use your bank accounts and internet banking. Learn how to effectively use the apps of various banks on your phones. Learn how to run your business without cash. Learn about card payments and other electronic modes of payment. Look at the malls and see how they function. A cashless economy is secure, it is clean. You have a leadership role to play in taking India towards an increasingly digital economy.”
The government is trying relentlessly towards achieving the Prime minister’s dream of ‘Cashless India’ and ‘Digital India’. However,there are a multitude of obstacles which are likely to hinder the process.(atleast the pace will decelerate). Let us take a glimpse of some of these obstacles:
- Meagre 856 PoS machines per million Indians:
There were 1.46 million PoS machines in use in India–that is, 856 machines per million people–according to this August 2016 Reserve Bank of India report.
The government has waived 12.5% excise duty and 4% special excise duty on these machines with an objective to banks and manufacturers to use PoS terminals. The government reportedly hopes to install an additional 1 million PoS machines by March 2017 to make the payment process as seamless as possible.
2. Smartphone usage rate among adults is not more than 17%:
Possession of a smartphone is inevitable to ensure smooth work ability of mobile banking applications. According to a 2016 survey by Pew Research. Only as less as 17% of Indian adults own a smartphone. In low-income families, only 7% of adults own a smartphone; the figure is 22% for wealthier families.
3. Economy confronting ever-rising Cash Crunch:
Owing to the sudden announcement of Demonetisation decision,the RBI was highly unprepared to confront the challenges of speedy printing of notes among other issues. After nearly a month elapsed post the demonetisation announcement,the economy continues to face the brunt of cash crunch. It is a difficult situation to cope with the situation and its grave nuances.
Despite the fact that RBI has accelerated the printing process,there are still serpentine queues outside ATMs and banks. Rs.2000 notes have been printed in reasonable quantity,but sadly people finds it difficult to trade the high-denomination currency. Reportedly,the wait for Rs.500 and Rs.100 notes is likely to continue for atleast a fortnight now.
4. Massive amount of friction from the opposition party and followers (Apparently unending):
More than the technical issues of Demonetisation,what is grabbing eyeballs is the continuous mushrooming of criticisms and jibes played by the opposition party,Congress and its leaders. There are intimidating statements issued by the party which continue to partially influence the public and infuse a negative feeling amongst the Aam-Aadmi(the main objective of the opposition, apparently).
5. 1.02 billion mobile subscriptions, but only 15% have broadband internet:
According to November 2016 TRAI report, India had 1.02 billion wireless subscriptions .However,if data of inactive and duplicate connections is scratched, India has 930 million (90%) active subscribers . Of these users , 154 million subscribers (15%) have broadband connections (3G + 4G).
Thus, clearly there is only a small fraction of mobile users who have broadband or internet connection facility for their computers. A 21st century however has made internet facility quite accessible for all those with a smartphone. Then,what does India lack? The major hassle in India is ‘Awareness among people’.Not only the government but all the country folks who are familiar with Internet benefits must spread their knowledge to ensure the dream of a ‘Cashless India‘ turns into reality soon.
Let’s work collaboratively to overcome all the obstacles in achieving a “A Digital India”,”A Cashless India.”
Modi and his cabinet ministers have also launched major social-media awareness campaigns to promote cashless transactions, which include e-banking, debit and credit cards, card-swipe or “point-of-sales (PoS)” machines and digital wallets.
Take a peek-a-boo: