In India 3 years back our honourable Prime Minister Mr Narendra Modi came out with out-of-the-box thinking and without any prior intimation, he announced around 8 am that I-currency note in the denomination of 500 Rs and 1000 Rs was to be faced out in 3 months’ time. At that time our market dealing was on hard cash and the percentage of transaction values was around 2%. There was an immediate cash-crunch Panic like the situation had arrived as commoner were unaware of the various digital platforms available/and in mofussil areas they did not even know that such parallel business could be transacted. Before venturing into the demonetization, he made the general public awareness through various government schemes, encouraged the citizen to open saving bank accounts and to enrol themselves in the unique identification citizen number.
Digital wallets that are stored on devices and linked to bank accounts or payment cards are being used to make online purchases and to buy items from physical shops through contactless technology. In digital payments both the payee as well as the payer using digital modes in order to receive as well as to send money.
India as a whole per capita income is much lower than the developed countries. Because of the new bank accounts open, the grants for the eligible citizens were directly transferred. This had cut the middleman cost and leakages. These middlemen used to take advantage of their illiteracy and they used to mop up the due grant value and dupe them also because the unique identification card lakhs of Rs was been siphoned off to navies who were non-existence. They were swamped names in the list of beneficiaries.
Parallelly an indigenous payment gateway was introduced by the name of Bhim and the introduction phase to encourage Indian citizen cash benefits was attached for the various transaction conducted. In the meantime during the demonetization stage government came up with a high denomination currency note of 2000 Rs. This was a temporary phenomenon tied away created a financial crunch.
The impact effect of this transformation was quite fearsome. Black money which was a parallel economy was reduced. This also helped and citizens to adopt a digital payment system.
Today slowly India is proceeding towards a cashless economy. Because of transaction in electronic Medium is utilized it is reflecting in their bank passbook. Thereby the government is also now understanding its citizen’s worthiness and these reforms are making citizens more tax compliments.
Due to this digital technological boom, one needs not to carry huge cash which becomes a risk factor as he is prone to theft, robbery….
Now all over the world he can carry a forex card and do his business. The government also benefits as the printing of currency notes cost comes down, the parallel economy of cash is retarded by bringing fiscal disciple like actual per capita income can be derived, citizens are discouraged to stack huge files of money in cash and the biggest advantage is money is in circulation.