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What steps/Initiatives did PM Modi take to encourage cashless society in India?
- For months before demonetization, government has been announcing new schemes, technology and policy moves on cashless methods.
- Government’s world record in number of new bank accounts opened have enabled 99% of households to have a bank account and over 93% of adults have Aadhar cards.
- A variety of new payment methods have come up now – RuPay, UPI, BBPS and AePS.
In May 2016, when the demonetization plan was put on motion [public still didn’t know until Nov 8] Modi made an address to the nation asking the people to go cashless: . Looking back, it was pretty clear on what problem government was addressing with demonetization.
In 2015 the government entered the guinness world records for the number of new bank accounts opened – people have bank accounts through this and majority of these are active. – Now, almost every household in India has a bank account: – If you are worried how your vegetable vendor or sweeper transact now, they likely have bank accounts.– 25 crore
Since I have been following the government policies for long, in the minutes post demonetization, the first thing that came to my mind regarding demonetization was a cashless society. It was a no surprise at all.
Cashless society. All of the above things are temporary things. But, I believe the long lasting one could be in moving cashless. The pain of transferring cash could incentivize many to think about going bits and plastic. Today could be a day to introspect for the legal users of the currency. That could have a more significant impact on counterfeiting and unaccounted money.
What plans did the government take?
In the electionthe plan to push e-banking was mentioned and the goal was a push on financial inclusion.
- Two months before the demonetization, government brought the ambitious Unified Payments Interface [UPI] into implementation. and .
- In August 2016, came the Bharat Bill Payment System [BBPS] – people to pay a variety of bills to government and private utilities through a common interface. – that is to enable
- In April 2016, came the FASTag to pay tolls electronically.
- In Feb 2016, government approved a wide range of measures to reduce transaction costs in credit/debit card usage: and
- In Jan 2016 – Aadhar enabled payment system – – early this year to address the lack of enough POS and Smartphones for a cashless society. Startups like PayTM quickly incorporated this system:
- With a slew of new enforcements and laws the government hit hard on gold purchases and there is a massive drop in India’s gold imports:
- What about real estate? That was touched too. There was a major bill this year and that has led to
- In the middle of 2015 came the Rupay credit cards:
- The government’s heavy push on Aadhar cards has resulted in 108 crore+ Indians having Aadhar card.
- One of the fundamental platforms that the government has been pushing hard since taking power was the JAM trinity – Jan Dhan, Aadhar and Mobile – a way to move payment between the government and people and between people to people.
- To enable widespread use of card payments, we need low transaction costs in contrast to the high charges done by Visa and Mastercard. There comes the RuPay. It was launched in the twiliight zone of UPA government and has been pushed so hard that nearly half of India’s debit cards are Rupay.:
Are all these connected to “black money”? Yes. To eliminate black money you need to account all transactions [black money just means unaccounted money] and that is why you need cashless economy – because cash is the fundamental way to escape accounting. Is black money also in real estate and gold? Yes, and they are attacked too: and
If you are really surprised by the Modi’s “jumla” towards cashless society then you are not reading the news and paying attention. Throughout 2016, the government has been talking of cashless society and easy payments. Just follow the links above.