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 -
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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
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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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