Feasibility of a Cashless Economy in India: An Analysis

This report delves into the feasibility of a cashless economy in India, exploring the challenges and opportunities associated with digital financial transactions. It begins with an abstract defining a cashless economy and highlighting India's efforts to transition away from cash-based transactions. The report discusses the hurdles India faces, including infrastructure limitations, cyber threats, and the need for increased financial literacy, particularly in rural areas. It also points out the advantages that developed areas have in adopting cashless platforms. The report examines the role of government policies, banking protocols, and technological advancements in promoting a cashless economy. It emphasizes the need for robust digital infrastructure, secure payment systems, and widespread education on mobile and card banking. The conclusion suggests that while India can become cashless, significant improvements in infrastructure, cybersecurity, and financial literacy are necessary for a successful transition. The report provides references to relevant sources and highlights the importance of addressing these challenges to achieve a truly cashless economy.

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INTERNATIONAL BUSINESS: INDIA AS A CASHLESS ECONOMY
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Abstract
A cashless economy is one that no monetary transaction is done either through notes or
cash. India has been trying to be a cashless economy despite the challenges it faces like
electricity in all regions, infrastructure of the cashless economy and the cyber threats. In this
research, we present the challenges India faces before becoming a cashless economy and what it
can do to improve.
Keywords: cashless economy, cashless platforms, mobile banking

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International Business
A cashless economy is one that monetary transaction is not done by notes or coins but
takes place through the digital way of doing financial transactions (Nwankwo & Eze, 2013, 5).
That means cards are what people carry around if they were to buy or sell anything. A lot of
nations have been slowly adopting this digital way for carrying out financial transactions. In the
recent past, the Asian countries have been trying to go cashless but the attempts have been slow
in changing as expected.
India is one of the countries that have been trying to be cashless. India is pretty much still
a cash economy: money in coins and notes are still being used to carry out transactions. The
Prime Minister of India recently announced that very soon the Rs. 500 and Rs. 1000 are going to
be done away with (Sood & Ashapurna, 2018). This has brought a lot of mixed feelings but this
is thought as one of the ways that will get India walking towards a cashless economy. India is a
cash-based economy, most people prefer paying in cash. It is so much into cash to the extent that
Amazon decided to have an option of cash on delivery on its menu. It is one of the countries that
lead in the payment of cash for goods and service in 2015, while the United States and the
United Kingdom stood at 20 and 25% respectively, India stood at 78%. This goes to show how
much India is into cash.
The author in Oliveboard cites that India has been ranked as the fourth leading country to
transact in cash in the whole world. This is a clear indication that the walk to a cashless economy
will be faced with many challenges. Though it will eventually be cashless, parts of India will not
be able to completely use cashless transactions. This is expected mostly in the rural areas, areas
where cash is the main means of transactions and places where there is no good distribution of
technology and there is a lot of illiteracy

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The developed areas, on the other hand, can be able to go cashless because they have
well-developed internet and electricity systems. They can be able to use Freecharge, Paytm and
many more cashless platforms (Joshi, 2017, 2249-3867). Another challenge India will have to
face before it can be cashless is the banking protocol. Most young people may know how to do
mobile banking but the old generation still has no idea on how to do banking and therefore more
teaching is required in this area. The government will also have to put in place the necessary
protocol in adopting the cashless economy, they can take part in forming a cashless economy that
is owned by the government, one that is protected from cyber threats and one that can be
supported with the digital infrastructure available.
Indeed, India can be cashless but much has to be done first, this is in terms of
infrastructure, cyber threats, knowledge on banking and more so the card and mobile banking
and electricity supply (Garg & Panchal, 2016, 116-12). With such things in mind, India will be
on its way to a cashless economy.

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References
Garg, P. and Panchal, M., 2016. Study on Introduction of Cashless Economy in India 2016:
Benefits & Challenges. Journal of Business and Management, 19(4), pp.116-120.
Joshi, M., 2017. Digital Payment System: A Feat Forward of India. Research Dimension (ISSN:
2249-3867).
Nwankwo, O. and Eze, O.R., 2013. Electronic Payment in the cashless economy of Nigeria:
Problems and prospect. Journal of Management Research, 5(1).
Oliveboard (n.d.). India's Movement Towards A Cashless Economy: An Analysis - Oliveboard.
[online] Oliveboard. Available at: https://www.oliveboard.in/blog/cash-to-cashless-
digital-india-economy-analysis-upsc-ias-current-affairs-gk-exam-study/ [Accessed 23
May 2019].
Sood, A. and Ashapurna, B., 2018. The new moral economy. Note-Bandi: Demonetisation and
India's Elusive Chase for Black Money.