Digital Economy And Economic Development Of India

A cashless economy runs on credit as debit cards, electronic funds transfer, or online shopping instead of cash. The idea of cashless economy is actually a revolution from the fiat money to digital money, generally adopted with the aim of removing the flow of black money and increasing transparency of the flow of cash. The move towards a cashless economy or electronic transactions might help to curb black money by reducing tax evasion and ensuring transparent functioning of the economy. Although, the risk of carrying money would fall, and a more planned structure of credit access and financial inclusion would come up. Government expenditure will increase in the direction of development process, as there is a possibility of increase in transparency and the flow of revenues. The past two months have witnessed a significant increase in the digitization of transactions in India and installations of swipe machines, be it at small shops or by street vendors. Achieving 100% cashless society will never be possible but one can always start from a less-cash society and then move towards cashless. Though Cash plays an important role in the society, and it is useful for discreting transactions, especially in the informal sector, it is very difficult to implement the concept of digital transaction. Digitizing financial transactions can prove to be an effective methods of curbing the large parallel economy in India. The use of Fake currencies and their use will fade away, along with the money laundering will also go down. By implementation of digital transactions, it would make book-keeping easier and increase the tax base, which substantially reduce the need to carry cash and the risk of physical theft.