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Since Demonetization, one term is very popular among 125 crore Indians, that is "Cashless Economy". Everyone is talking about it, it's benefits, drawbacks etc. Now, government is more focusing on cashless economy through E-Wallet, E-Payment etc. First of all, we should understand the definition of demonetization.
"Demonetization is the act of stripping a currency unit of its status as legal tender. Demonetization is necessary whenever there is a change of national currency. The old unit of currency must be retired and replaced with a new currency unit." In economics demonetization is one of the tool to curb counterfeit and black money. Demonetization is an excellent tool to curb counterfeit money.
The decision of demonetization came under Reserve Bank of India Act 1934, when central government took the steps to demonetize higher currencies of Rs. 500 and Rs. 1000 with new Rs. 500 and Rs. 2000 notes with effect of November 8,2016 12:00 PM.
Now, government is talking about cashless economy. I would say, cashless economy is the one of the best way to curb counterfeit and black money after demonetization. There are certain reasons behind it:
Cashless transaction will be termed as direct transactions so there is no scope of hide taxes. No one can hide the amount of business done by this transaction. People need not to carry cash, this will drop down the cases like robbery, pick pocketing etc. Taxation will be transparent and government will get more money for the sustainable development of the country. Economy will be more stable. There are few things that will be barrier in implementing this scheme: Education level of the people. In rural areas it is more difficult to implement this. Cyber crime graph will be rise.
What are the actions should be taken to make it more efficient? Cashless transaction is beneficial for the country's growth. Following steps should be taken to popularize the Cashless Economy. First of all government should educate people about the benefits of the Cashless Economy to the people. People should be trained to use this. It should be mandatory for every registered shopkeepers, vendors to use swipe machines for the payments. NGOs or other agencies needs to run campaign in every village, blocks, districts about the cashless economy. Government announced discounts while doing E-payments in Online Ticket Bookings, Petrol Pumps, Monthly Seasonal Tickets of Railways etc. All leading stores should also offer cashback schemes on E-payments. All the transactions above Rs. 2000 should be done through E-Payments or cheques only. Banks should not release more than Rs. 10000 cash in a month from one account. This will automatically stop the transactions in cash. All the cash transactions should be monitored by ED (Enforcement Directorate) of India. No service tax will be applied for transaction below Rs. 2000 through E-payment. These steps should help people to choose Cashless Economy.