In this Cashless Economy Essay, we have discussed the Cashless economy in India in detailed.
Along with the advantages and disadvantages of Cashless Economy, what is digital payment and its effects in India are also discussed.
Cashless Economy India is a mission launched by the Government of India under the leadership of Prime Minister Narendra Modi to reduce the dependence on cash and heap unused false black money hoarding in the banking system.
The country began this cashless transition when the government took the revolutionary step of Demonetisation of old notes of 500 and 1000 rupees on 08 November 2016.
We had provided various essay on cashless economy, read this complete article for more information.
Cashless economy essay 1000 words:
What is the cashless economy?
When you buy any goods from the market, usually pay the price of the goods by paying cash and when we pay the money with Debit card, Credit card, Mobile App, or Wallet or Internet and Mobile Banking.
This is called Cashless Payment or Digital Payment.
Its uniqueness is that even if you do not have cash, you can easily transact through the cashless payment app.
Finance Minister Arun Jaitley has announced the following concessions to promote cashless payments:
1. Credit card / debit card / metro card, e-wallet will get 0.75% discount on petrol / diesel purchased at petrol pumps.
2. Indian Railways Catering and Retiring Room will get 5% discount on cashless payment.
All railway passengers buying online train tickets will get a free insurance cover of ten lakh rupees.
3. 0.5% discount will be available on online purchase of monthly and season tickets in suburban trains.
4. Public sector life insurance companies will get an 8% discount on online payment of life insurance policy and 10% on online purchase of general life insurance policy.
5. Public sector banks will not charge more than Rs 100 per month for POS machines.
6. Digital transactions up to Rs 2000 will not attract service tax.
7. NABARD RuPay Cards will be made available to all Kisan Credit Card holders.
According to the Managing Director and CEO of National Payments Corporation of India, the number of transactions through mobile has increased from 12 lakhs per day to 18 lakhs per day.
Implementing digitization is an obligation to develop a cashless economy after demonetization.
The Ministry of Electronics and Information Technology, Government of India has started a 24-hour channel named “Digital Shala” to give people information about cashless transactions. It is being run by Doordarshan.
Digitization of a developing country like India is not as easy.
Nevertheless, the following challenges make the success of Cashless India Mission mentioned in this Essay:
- Around 30 crore people of the country are illiterate.
- Over 30 crore people are educated but are not proficient in operating or using electronic devices.
- Telephone density maybe around 82% but smartphones are still with limited people.
- Internet is not available in all geographical areas of the country.
- The uninterrupted power supply is not available.
- There is no exact system of cybersecurity.
- 95% of the population of the whole country still works with cash transactions.
- Presently, these are some ways of cashless online payment in India, with the help of which people are working online money transfer/payment etc. even in the event of no cash.
Also, read the Merits and Demerits in Cashless economy essay in 300 words below.
9 Cashless online payment methods:
Cashless online payment methods / digital payment methods can be divided into three parts:
1. Plastic Money:
Two types of cards are in trend nowadays under Plastic Money.
This is the most popular method of cashless online payment method.
Whenever it opens a new bank account, the bank gives it an ATM i.e. debit card.
Not only can transactions be done in ATM machines, but cashless online payment can also be done.
The bank provides a card in it which can be used to the limit set by the bank and this limit is determined on the basis of income.
Credit card is the most convenient way in the way of cashless online payment because it does not always carry cash nor worry about the balance in the bank account.
2. Electronic Fund Transfer:
Through this, you can transfer money to someone.
This cashless online payment method can be divided into three parts:
NEFT (National Electronic Funds Transfer):
With this, you can transfer money only when the bank is open.
There is no limit on the maximum amount of money you can transfer from NEFT.
RTGS (Real Time Gross Settlement):
It is used for high/large value transactions.
In this, you cannot transfer less than 2 lakh rupees and can transfer a maximum of 10 lakh rupees.
IMPS (Immediate Money Payment System):
With this money is transferred instantly with safety and its speciality is that its service is available 24 * 7 day or night.
3. Best Cashless Payment App/ E-Wallet:
After demonetization, E-Wallet has become a great option as a way of cashless online payment.
Just as the bank allows us to spend our money through debit card, in the same way, some payment services allow payment through a computer or mobile app.
The same facility is also provided through e-wallet.
Apart from private companies, many banks have also issued an E-wallet facility.
At this time, e-wallet is growing very fast due to lack of cash.
Through this, we can get money from booking cabs, eating in restaurants, shopping to watch movies, as well as giving friends their phone numbers.
On paying this, companies also give some per cent cashback. Also, Read more about Cashless Economy Essay in 500 words.
Nowadays there are many types of e-wallet cashless online payment methods available in India, out of which I am talking about some famous e-wallet:
As a way of cashless online payment, Paytm has become a better option in a very short time.
Just like you keep money in your purse, you can keep money in Paytm wallet.
You can download it from Google Playstore.
If this app is already present in your mobile, then update it so that it can take advantage of its new features.
In this, you can create an account with your name, mobile number and email address.
From here you can deposit money in your paytm account through your debit card, ATM or net banking and transfer money to someone or ask for money from your friends.
You can also easily purchase and pay bills through Paytm.
It is necessary to have a free charge app in mobile to take advantage of it.
So, first of all, download the Freecharge app from Google Playstore in your mobile.
You can pay for mobile recharge, DTH, petrol, gas etc. from this app.
You can shop online from eBay, Jabong, Mintra etc.
Apart from this, you can also pay for Bookmyshow, MakeMyTrip, Bigbasket etc.
First of all, you have to download the Mobikwik App in your mobile from Google Playstore.
After this, registration will be done on MobiKwik through your email id and mobile.
After registration, from this app, many options have been given to book from mobile / TV recharge to bus and also you can pay at more than 1 lakh offline and online stores.
Through this money is immediately transferred. Oxigen Wallet can be paid to anyone anytime and anywhere in less than 5 seconds.
There is no need to keep a minimum balance in Oxigen Wallet.
There are many offers on shopping with merchant partners of Oxigen Wallet.
Along with online shopping in India, the trend of people has also increased towards online payment.
Cashless online payment has solved the cash problem of the people on the one hand, on the other side, people’s time is also being saved.
People do not have to stand in long queues of banks or ATMs and people are able to easily get the goods they need. We hope you like the Cashless economy essay.
Also, Read Is India ready for a cashless economy in Essay on cashless India 500 words below.
Essay on cashless India 500 words:
In today’s times, financial transactions do not take place in physical form (banks, notes or coins) with money but through the transfer of digital form, it is called a cashless economy.
Cashless India mission was launched by the Government of India under the guidance of the Narendra Modi.
Is India ready for a cashless economy?
No, India is not ready for a cashless economy.
The objective of this mission is to reduce the dependence of the Indian economy on cash so that large amounts of hidden black money in the country can be brought back to the banking system.
Increase of Digital Payment and digital payment transactions by the Demonetization.
The mission started on 8 November 2016, when the government, in a revolutionary initiative, announced a sudden depreciation of old notes of 500 rupees and 1000 rupees, and this caused panic in the entire country.
The government took this step to end the parallel economy run by black money and fake currency, which was mainly being used for funding criminals and terrorists.
Because of this decision, people struggling with a severe shortage of money and they had to stand in long queues outside banks and various ATMs to exchange their old currency and get new currency.
Initially, people had to face a lot of difficulties to replace the old currency with the new currency and withdraw money from their own accounts and that is why the government’s move was also severely criticized.
According to the government’s critics, it was not right to take such a big step suddenly without suitable arrangements.
According to him, all the arrangements should have been made before taking such a step.
Critics said that online transactions are not safe in India and incidents of online fraud are common.
Therefore, there is a need to adopt suitable security measures.
Critics presented a very frightening picture of the entire episode, arguing that due to unavailability of required cash flow in the market, many people died and many people lost their jobs.
However, after the demonetization of all the old Rs 500 and Rs 1,000 currency, the country has witnessed a surge in cash transactions by the digital medium.
Cashless India through various applications under credit/debit cards, mobile phone applications, Unified Payment Interface (UPI), Bhima (Bharat Interface for Money) app, Aadhaar Enabled Payment System (AEPS) or e-purse.
The expected progress towards achieving the target has been recorded. Also, read below Essay on Cashless India.
There are several advantages of controlling cash flow with the help of digital technologies.
Due to cashless transactions, people have to keep cash in banks and due to this, the liquidity in the banking system has increased.
Along with this, the flow of black money has been controlled to some extent.
Now more money is available in banks and financial institutions to support the development of the Indian economy and to give loan to the people.
Apart from this, the most important benefit has been that this situation will inspire people to pay their taxes in a transparent manner and thus the government will have more money to run various schemes designed for the welfare of the public.
Cashless economy Essay in 300 words:
Cashless India is a recently launched campaign by which the Government of India is moving towards making the cash-based economy to cashless through digital means and thus endeavours to bring a major change in the country’s economy.
Merits and Demerits of cashless economy:
Advantages of cashless economy:
1. No need to carry money:
Ease of financial transactions is the best thing for digital payment systems.
You do not need to carry cash, plastic cards, bank or ATM lines.
This is a safe and easy option to spend, especially when you are travelling.
2. Pay whenever you want:
Digital payment allows you to pay money anywhere and anytime.
Many times you do not even have to be there to pay and you do not have the bother of payment in any office time.
3. New technology world:
It is like walking in step with the world in the present era because in many countries all over the world, now transactions are done only through electronic transactions and there is no need for cash transactions.
4. Black money busted:
The disbursement of black money through hawala channels by cashless transactions is prohibited.
This prevents the use of unaccounted money in promoting criminal and terrorist activities.
5. Helps in reducing interest rates:
The huge amount of cash deposited in the banks helps in reducing the interest rates and at the same time, the banks are able to use this cash for productive purposes.
6. Brings economic growth:
Tax collection becomes easier through cashless mode and it accelerates the pace of economic development as it becomes easier for the government to spend on education, health, employment generation, infrastructure development and overall welfare of the people.
7. Easy to calculate in digital payment:
The digital transaction allows you to calculate your expenses by looking at your expenses in one click so that you can control your budget easily.
Disadvantages of cashless economy:
Demerits of having a cashless economy are as follows:
In a large country like India, where a large population is forced to live below the poverty line.
In such a situation, if the cash transaction will be ended, then they will have to face a lot of difficulties.
2. Lack of other payment options:
Due to almost all financial transactions being digital, the importance of mobile will increase greatly and if mobile will be lost increases the risk.
With no other payment option and no cash, the problem may deepen.
3. Difficult to pay the senior citizens:
There are more problems for senior people.
If they do not have cash and are unable to download the app, they will feel helpless.
Also, it would be a challenge for them to understand this technique. We hope you like essay on Cashless economy.
Frequently Asked Questions:
What are cashless transactions?
A “cashless transaction” is a transaction which is made electronically i.e. credit card, debit card, etc.
What countries are cashless?
Countries like Denmark and Norway are at the top in adopting cashless payments
How is cashless economy different from cash economy?
Cashless economy refers to an economy in which cash flows takes place through digital means of transactions, i.e. credit and debit cards, etc.
What is the cashless India?
This program is the leading program of the Indian Government, with a vision to transform India into a digitally empowered society and knowledge economy. Faceless, paperless, cashless is an important role of Digital India.
Which is the first cashless state in India?
Goa has become the first state in India to become cashless from December 31, 2016.
Conclusion for Cashless Economy Essay:
Friends, the time has come to say goodbye to paper currency and cooperate in the development of the country by making maximum use of Cashless Online Payments.