(An interview of Zulfiqar Sheth (PhD Research Scholar, Department of Economics, Aligarh Muslim University, on “The dream of cashless economy : challenges ” published in Dainik Jagran Dated 6 December 2016. )
Zulfiqar sheth argued the major challenges are financial illiteracy, low bank account penetration, poor internet connectivity and dependency of informal sector on cash.
The large no. of Indians still depend on agriculture and lives in rural areas. According to 2011 census nearly 30% Indians can’t read and write their name. Out of many who are literate they do not know banking and are habituated to do their all transactions in cash.Without financial literacy the dream of cashless economy is not possible.
Approx. 28%-32% of Indians have access to financial institutions, including post offices and banks. Further, 33% of the 138,626 bank branches are in 60 Tier-1 and Tier-2 cities, leaving rural India at a huge disadvantage. Migrants laborer, and other weaker sections do not posses ID card and other documents require for KYC norms of banks. Moreover the cumbersome process of account opening keeps many people away from banking.
Internet connectivity is also a problem that we have to solve before we set for complete cashless economy.
India’s economy is largely dependent on unorganized sector. Most of our employment are created here and this sector is heavily dependent on cash transactions. In Cashless economy cycle-rickshaws / autos will be replaced by cabs and small vendors / shopkeepers will be replaced by large shopping malls.
Thus, the dream of cashless economy can only be achieved once we promote financial literacy at all level, increase bank account penetration, maintain good internet connectivity and assure cyber security. We also need to pay heed towards problems faced by informal sector. Here the role of government, administration, policy makers, youth, students, teachers, civil society organizations, and NGOs become crucial.
Read here the full interview in Hindi.