India is one of the few nations that runs on cash. With increasing technology, there has been a rise in digitalisation of the economy, around the world. Some of the countries that are more virtual than cash based economies include U.S.A., Japan, U.K., China and most of Europe. With this move of demonetisation, India is heading in the same direction of becoming a digital economy.
In the Digitalised countries and the Western countries if this move of demonetisation happened it would be a mild inconvenience; nothing that would disrupt a nation’s daily life. That is mainly because major chunks of the population own debit and credit cards. 95% of the transactions in India are made using cash, this is mainly because the majority of people are still below poverty line. Notes of all denominations and coins are mostly used for transactions. In India it is a luxury to own a bank account! Things started changing in June 2014 when Prime Minister Narendra Modi introduced Zero balance accounts. There are now 25.45 crore new bank accounts in rural and urban areas. This means that almost every family now has an individual that has a bank account.
The announcement of demonetisation on November 8, came as a surprise to a few sectors of people and a lot of politicians who are now creating a lot of ruckus regarding this. But the action has been taken and is applauded and supported by many and has taken steps towards success. When the UPA came to power the first thing they they vowed to do was to eradicate black money. Demonetisation is the first step towards a better, corruption free and a digital economy based India. This movement of removing large value notes has given India its first cashless village, Akodara, situated 60 miles north to Ahmedabad.
The chaiwallas and vegetable sellers have started using digital apps like e-wallets, online payment sites and even debit/credit cards. RBI has also been urging people to make higher use of the internet and mobile banking and depend less on physical currency. If truer words are spoken the first step towards digitalisation has taken off successfully. This will only make India empowered and corruption free leading it towards being an economic superpower.