Cash to Cashless Economy : A Case Studyadalyajournal.com/gallery/35-nov-2194.pdf · Cash to Cashless Economy : A Case Study Tanya Sharma Research Scholar Department of Economics L.N

Cash to Cashless Economy : A Case Study

Tanya Sharma

Research Scholar

Department of Economics

L.N. Mithila University, Darghanga,

Bihar (India).

Abstract:-

In this paper the views of people on Introduction of Cashless Economy in India have been studied.

Cashless economy is likely to help in imbibing black money, counterfeit fake currency, fighting

against terrorism; reduce robbery and help in improving the economic growth of our country. The

study shows that the Introduction of Cashless Economy in India can be seen as a step in right

direction. It is expected to help in growth and development of economy in India.

Keywords :- Cashless Economy, Corruption, Black Money, Digital Payments.

Introduction

The Digital India programme is a flagship programme of the Government of India with a vision to transform

India into a digitally empowered society and knowledge economy. “Faceless, Paperless, Cashless” is one of

professed role of Digital India. As part of promoting cashless transactions and converting India into less-cash

society, various modes of digital payments are available. The cashless transfer is soon becoming the most

preferred option and there are a number of benefits of going cashless. The digital or electronic transaction of

the capital by using net banking, credit cards etc. is called cashless transfer. People can easily pay their bills

online, shop and schedule transactions and manage all the finances using their laptops or Smartphone. Going

cashless not only eases one's life but also helps authenticate and formalize the transactions that are done.

This helps to curb corruption and the flow of black money which results in an increase of economic growth.

The expenditure incurred in printing and transportation of currency notes is reduced. In a nation like India,

cashless transactions are not widespread and this is due to the technology gap and the lack of proper

education. Though these are the matters of concern, the government or the financial institutes need to

address them to create a strong cashless economy.

Objectives

1. To study the Government initiatives regarding use of Information Technology to move

towards use of minimum cash for transaction.

2. To study the promotion of digital transaction to meet the less use of cash.

3. To examine the different aspects and contexts of citizens approach towards adoption of

digital means for transaction purpose.

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4. To examine the different questions in context of digital payment.

5. To suggest various remedial measures for cashless transaction.

Methodology

This study is based on primary data. Primary data was collected with the help of structured

questionnaire and analysed using simple percentage method. The area of study was conducted in the

Patna District in Bihar. 300 respondents have been selected for this study. The primary data will be

collected from these 300 respondents by administering the structured questionnaire.

Data Analysis of the Study

A. Respondent’s Background

Nature and Composition of the Population

Out of the total respondents 93% are male and 7% are female 81% of the respondents are Hindus and

19% are Muslims and 1% is Christian.66% of the respondents are OBC, and SC, ST and General

percentages are 8,5,& 21 respectively.

Table-1-Age of the Respondents

Sl No. Age in Completed Years Percentage

1 15-25 35

2 26-35 37

3 36-45 17

4 46-55 7

5 55 and above 4

In this Table-1 it is clear that 37% of the respondents fall in the age group of 26-35.The percentage of

the respondents from the age group of 15-25 is 35. There are 4% of the respondents who fall in the

age group of 55 and above. This shows that 72% of the respondents are in the category of active

population, whose participation actually matters.

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Chart-`1

Out of total respondents 36% are unmarried, 57% are married and 7 percent are in the category of

Widowed/Divorced/Separated/Deserted.

Chart-2

Majority of the household having 5 to 6 persons ,which is 49%.26% of the households having 3to 4

persons.21% of the households have 7 and more than 7 persons, which shows that composition of the

household matters in decision making.

Merital status of the Respondent

Unmarried

Married

Widowed/Divorce/Separated/Deserted

No. of Person in the Household

01-02

03-04

05-06

7 and Above

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Chart-3

Chart -3 shows that 38% of the respondents are graduate, 23% completed 12th class, 13% completed

10th class, and 4% are post graduate. Regarding 1%, the education level is not specified.10% are

educated up to Primary, 9% are educated up to middle level and 2% are illiterate.

Figure -1

In Figure -1 it is shown that 35% of the respondents belong to the category of monthly income of

5,000 to 10000 and 34% of the respondents belong to the category of 10,000 to 20,000 monthly

income. Which shows that 69% of the respondents belong to medium level of income category.7% of

Education of the Respondent

Illiterate

Up to Primary

Up to Middle

Completed Class 10th

Completed Class 12th

B.A/B.Com/B.Sc

Post Graduate

Others

0

5

10

15

20

25

30

35

Less than5000

5000 to10000

10000 to20000

20000 to25000

25000and

above

Monthly income of the family

Monthly income of the family

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the respondents are having less than Rs. 5000 per month.15% of the respondents are in the category

of 20,000 to 25000 monthly income.6% of the respondents fall in the category of monthly income of

25000 and above. Majority fall in the category of monthly income starting from 5,000 to 20,000, so,it

is very important to make them aware of the different aspects of cashless economy.

Figure -2 exhibits the type of business in which respondents are involved .This will help in justifying

the importance of digitalisation in their respective business.34% of the respondents are having small

Kirana shop.13% of the respondents are working in big Kirana shop.13% of the respondents are fruit

vendors. Only 2% are working in cloth shop.13% are occupied in

hardware/medical/mobile/optional/furniture/stationary shops etc.10% are working in Tea Shops

while 8% are vegetable vendors.7% of the respondents are involved in grocery shop.

Figure-2

B. Knowledge and Awareness

0

5

10

15

20

25

30

35

40

Types of Business

Types of business

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Chart-4

According to 81% of the respondents banking activities will be easier after digitalisation. Electricity

and water facilities will be provided easily after digitalisation according to 86% of the respondents.

24% are of the view that digitalisation will make delivery of educational institutions more easier.

Chart-5

Different ideas regarding digital India has been indicated which shows that 67% of respondents are of

the opinion that free wifi at all public places is the most common process to make the society

digitised.63% are of the opinion that Internet connection in every rural area is required.55% favoured

Area that will become more convenient after digitalization

Reservation

Banking

Electricity/Water facilities

Educational institutes

Others (e-shoping)

Idea of digital/cashless India

Internet connection inevery rural area

Digitalization of all GOVT.WORK

Free WiFi at all publicplaces

Digital litteracy

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the process of digitalisation of all government work. Digital literacy is also important according to

48% of the respondents.

Chart-6

On the basis of the survey it can be concluded that 46% of the respondents rated digital system as

good initiative. Only 5% of the respondents rated this system as a poor initiative, which means

respondents are in favour of digital system. Majority of the respondents i.e. 83% are confident that

cashless India will meet the target of progress through digitalisation.6% of the respondents showed

indifferent attitude and their response was not specified. Out of total respondents interviewed only 21

percent are not having access to Internet connection in mobile phones.79%of the respondents are

having access to Internet connection in mobile phones.

Chart-7

Digital/cashless India will get success

Yes

No

Indifference

Likeness to opt various mode

UPI

PAYTM

POS

Others (google pay,all apps etc.)

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In the above chart-7 it is shown that 68% of the respondents favoured PAYTM mode of payment.

Google pay and all Apps except UPI, POS are not very popular among the respondents.

Chart-8

Chart-8 pointed out that according to the 3 percent of the respondents digital education is most

important thing to convert India digitally. Other 6 percent are of the view that literacy to rural people

is must. Total 91 percent of the respondents are of the view that both literacy of rural people and

digital education are equally important to convert India digitally.

Chart-9

Most important things to convert India digitally

Literacy to rural people

Digitally Education

Both

Can Rural people adopt the digital change in our country?

Yes

No

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The study reveals that rural people can adopt the digital change in our country according to 68% of

the respondents.32% of the respondents are of the view that it would be difficult for rural people to

adopt the digital change in our country, because the process of making them aware and financially

literate is time taking process which require the strong infrastructure base of rural economy.

C. Opinion

In this Table-2 opinions of respondent recorded regarding enlisted statements which shows positive

and negative gains of digitalisation.40% of the respondents disagree that cashless economy will

hamper the functions of banks and the circulation of currency in India. On an average 28% of the

respondents agree with these two statements. On the average 58% of the respondents gave their

opinion in favour of cashless economy. This strengthens the justification of cashless economy. Only

4.4% strongly disagree with the positive gains of cashless economy.11% of the respondents neither

disagree nor agree the statements mentioned in the table.9.2% of the respondents strongly agree that

cashless economy is more suitable while 6% of the respondents strongly agree that cashless economy

will hamper the functions of banks and the circulation of currency. On the basis of above analysis, in

which responses are recorded on the basis of multiple responses, out of all the categories of

responses 58% of the respondents agree that cashless economy will give all the positive benefits

outlined in the table.

Table-2

Statements

Responses in Percentage

Strongly

Disagree

Disagree Neither Agree Strongly

Agree

1.Mobile payment is growing and expected to grow 7 11 4 70 8

2.In future people will hardly use cash to make a

payment

3 27 8 56 6

3.Credit and Debit cards most preferred payment 0 45 23 27 5

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4. Mobile app can help to classify sales for

budgeting

0 34 17 46 3

5.Cashless economy will reduce the risk of fake

currency

5 26 9 48 12

6.Cashless economy can check corruption 3 32 10 45 10

7.Cashless economy will enhance GDP 1 9 8 39 11

8.It would be effective in controlling Naxalite

activity in the state

4 38 8 39 11

9.Literacy is required for Cashless Economy 1 15 3 61 20

10.Transparency in Cashless Economy 3 27 8 53 9

11.It will enhance the efficiency of the economy. 1 9 7 72 11

12.Electronic channel will play an important role in

Financial Inclusion

1 8 8 71 12

13.Cashless economy will hamper the functions of

banks

16 40 12 23 9

14.It plays a vital role in implementation of welfare

programmes in urban informal sector

2 15 18 59 6

15.Digital payments will lower the transaction cost 5 33 17 40 5

16.It will hamper the circulation of currency/notes 10 40 15 31 4

D. Practice

In this Figure-3, 96% of the respondents receive the cash every day. 3% receive three to six times a

week and 6% receive the cash one or two times a week. Majority are dealing with cash every day. So,

it is important to make people aware of different methods of payment without using cash, facilitating

the growth of efficient economy and at the same time it will help in maintaining the record of all

transactions.

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Figure-3

83% of the respondents preferred to receive cash or card payment. But only 3% of the respondents

preferred card payment.14% of the respondents prefer only cash payment. This shows that people are

in favour of facility of anytime and anywhere payment transaction. So, this is the case for Cashless

Economy. Majority do not have any issue in making payment or receiving payment through cards.

68% of the respondents are making payments from mobile phones While 32% of the respondents are

not making payments through mobile phones.

0

20

40

60

80

100

120Frequency to receive cash

Frequency to receivecash

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Chart-10

Figure -4 shows that 53% of the respondents are of the opinion that cashless transaction will increase

the chances of sufferings from fraud or theft. On the other hand 47% are in favour of cashless

transactions because they are of the opinion that it will not increase the chances of sufferings from

fraud or theft, as every transaction detail will be recorded.

Figure-4

Receiving payments from mobile phone/smart phone

Yes

No

44

45

46

47

48

49

50

51

52

53

54

Yes No

Cashless selling will increase the chances of suffering from fraud or theft

Cashless selling will increase thechances of suffering from fraudor theft

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Conclusion and Suggestions:-

Hence, it may be concluded that cashless transaction system is reaching its growth day by day. As

the market become globalized and the growth of banking sector more and more, the people moves

from cash to cashless system. The cashless transition is not only safer than the cash transaction but it

is less time consuming and trouble free from wear and tear like paper money. It also helps in record

of the all the transactions done. However, there are difficulties in implementing the idea of cashless

economy in a vast country like India where a large number of people are living under misery and

poverty, yet a beginning had to be made someday. It is important to note that there is now a sea

change in the mindset of people with regard to digital means of monetary dealings which are safe,

easy, convenient and transparent. There is no place for black money or counterfeit currency in

cashless India.

Remedial Measure to Improve Cashless Transaction:-

1. Open new bank accounts and ensure their operationalization.

2. Abolishment of government fees on credit card transactions; reduction of interchange fee

on card transactions; increase in taxes on ATM withdrawals.

3. Tax benefits for individuals and institutional entities who adopt the digital transactions.

4. Making Electronic payment infrastructure completely safe and secure so that incidents of

Cybercrimes could be minimized and people develop faith in electronic payment system.

5. Create a culture of saving and faith in financial system among the rural poor.

6. The RBI and govt. has to address the issues like security of digital transactions, creating

interests of rural population regarding digital transactions and directing financial

institutions to make digital transactions easy and economic.

7. Due to big population size it takes more time to make whole economy as digital. But in

place of whole economy the urban areas can be made cashless because it constitutes more

than 70% of Indian economy. The financial system needs a well-designed and executed

set of strategies to make the whole economy as digital economy.

References:-

1. Annamalai, S. and Iiakkuvan R. Muthu (2008). Retail Transaction: Future Bright for Plastic

Money, Facts of You, May, pp. 22-28.

2. Alvares, Cliford, (2009) “The problem regarding fake currency in India.” Business Today;

3/8/2009, Vol. 18 Issue 5, p24-24.

3. Ashish Das, and Rakhi Agarwal, (2010) Cashless Payment System in India- A Roadmap

Technical Report 2010.

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4. Bansi Patel, Urvi Amin (2012) Plastic Money : Roadmay Towards Cash Less Society PARIPEX -

INDIAN JOURNAL OF RESEARCH Volume : 1 | Issue : 11 | November 2012 ISSN - 2250-1991.

5. Jain, P. M. (2006). E-payments and E- Banking. Indian Banker, March. pp. 108-113.

6. R. Shenbagavalli, A. R. Shanmugapriya, and Y. Lokeshwara Chowdary , Risk Analysis of Credit

Card Holders, International Journal of Trade, Economics and Finance, Vol. 3, No. 3, June

2012.

7. Reddy, Ramakrishna. (2006). Card Products in India. Indian Banker, March. pp. 133-134.

8. Srinivas, N. (2006). An Analysis of the Defaults in Credit Card Payments, Southern Economics

. July. pp. 19 -21.

9. Zandi, M, V. Singh & Irving, J. (2013). The Impact of Inequality on Economic Growth on

Economic Growth, pp 1–16

10. Liao, W & J. Handa (2010). Is the Modern Economy Heading toward a Cashless and Checkless

one: Evidence from the Payments System in Canada? 9, 48–71.

11. Oyewole, O.S., El-Maude, J.G., Abba, M., & Onuh, M.E. (2013). Electronic Payment System

and Economic Growth: A Review of Transition to Cashless Economy in Nigeria, International

Journal of Science, Engineering, Technology, 2, 913–918.

WEBSITES:

1. www.RBI.org.in

2. www.indianeconomy.net

3. www.indianbudget.nic.in

4. www.cashlessindia.gov.in

5. http://cashlessindia.gov.in

6. http://www.ijcter.com

7. www.business-standard.com

8. RBI Report (2017). Data Release, Bankwise ATM/POS/Card Statistics.

9. Reserve Bank of India Annual Report 2015-16, 2016-17.

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http://cashlessindia.gov.in/

http://www.ijcter.com/

http://www.business-standard.com/

Documents

Cash to Cashless Economy : A Case Studyadalyajournal.com/gallery/35-nov-2194.pdf · Cash to Cashless Economy : A Case Study Tanya Sharma Research Scholar Department of Economics L.N