Jain (Deemed-to-be University) hosted a fascinating panel discussion on “Is India ready for a cashless Economy?” on 30 November 2016 at School of Commerce Studies. The panel composed of distinguished speakers from various professional backgrounds included – Dr. Sandeep Shastri, Pro Vice Chancellor, Jain (Deemed-to-be University) & Political Scientist, Mr. Krishnaswamy, Chartered Accountant, Prof. Charan Singh, RBI Chair Professor in Economics at IIM Bangalore, Mr. Deepak Mullick, CEO and Founder of Simply Mutual, Mr. Srinivas Shroff, Chief Manager (Training) State Bank Learning Centre, Bangalore. The discussion was moderated by Mr. M R Arun Kumar, Chief Manager (Retd) State Bank Learning Centres.
The recent Demonetization drive by the government incorporated multiple intentions: a shock treatment to black money, repulsing terrorist funding and decimating counterfeit currency. The fallout included public shock, political and other disbelief that this couldn’t have been happening, and a scramble for small money. It turned everyone into being an economist, and caused a deluge on the social media, exceeding the volumes hitherto seen on issues affecting national security, OROP, pollution, constitutional reforms and the like.
To briefly paint a picture of the environment that demonetization has occurred in – an overwhelming 86% of all cash transactions in India were made with the now discontinued INR 500 and INR1000 bills. A report by Google India and Boston Consulting Group showed that in year 2015-16 around 75 per cent of transactions in India were cash-based while in developed countries like the US, Japan, France, Germany etc it was around 20-25 per cent. Now, in spite of government incentives like cutting down on service charge and other taxes on debit/credit card transactions and the increased focus on promoting e-payments and “cash-less economy”, the doubts still prevail about our nation being equipped enough to be a cashless economy.
To begin with, each panelist spoke their mind on the rationale for, the execution of and the potential future effects of cashless economy. Unsurprisingly, this led to a wide spectrum of contrasting views – from being heralded as an inevitable future, to being poorly perceived positivity and doubtful future due to a severe lack of critical infrastructure and technology, to being an achievable dream that can lead to a more transparent economy and a possibility of less corrupt India.
A key point to Dr. Charan Singh’s argument was about our nation’s demographic diversity and technology and he also listed out the potential challenges that we as a nation should be ready to face. In his view, the kind of regional, linguistic, demographic and social diversity we have, along with the population we represent , it’s a herculean task to make our economy a cashless one, considering that a developed economy like the US with much less diversity than what we represent is also not a complete cashless economy.
Mr. Krishnaswamy was much more positive and welcoming with regard to this new direction the nation is moving forward. In his opinion it is rather an inevitable move towards better future. In his words “Technology is always disruptive” and hence initial anxiety, disturbance and doubts are bound to happen.
Dr. Sandeep Shastri echoed Dr. Charan Singh’s words confirming that the move towards cashless and paperless India is somewhat “utopian” as we still have a sizable population that is yet not comfortable with the idea and technology of being “cashless”. Although he did quote “Cash carries all the diseases” but along with that he also validated the limitations the nation suffers from and why India being a cashless economy is a distant future.
Mr. Sandeep Mullick resonated with Mr. Krishnaswamy, in his view it is rather a good news for people who are honest and working the hard way to earn money. In India barely 1% of the total population pays tax, considering this fact, the move towards cashless India is going to make India a stronger and better economy as sizeable volume of cash is injected in the economy.
Lastly, Mr. Srinivas Shroff, with all his experience as a banker presented a more positive view about supportive infrastructure and technology that nation already has and the ones that are in process to support this cashless move. He also mentioned that the role of government is very crucial and it’s absolutely essential to involve all the stakeholders in the process of making cashless economy a reality.
As the discussion went on, intriguing questions were raised by the moderator that led towards the metamorphosis of Indian economy from a corrupted economy to the idealistic cashless economy. Prof. Singh and Dr. Shastri expressed their concern about the increased desensitization to the suffering that the marginalized groups may face in future and the misplaced positivity to embrace strategies that appear revolutionary, without building a fuller understanding of the costs and benefits. Also, technology and infrastructure remain the additional challenges In a contrary view, Mr. Srinivas discussed about e-mandis, new bank products- services and translator software that would ease out the intensity of potential problems.
Towards the end, more or less all the panelists agreed that India does have the potential to transform into a cashless economy in distant future. However the time that the nation is going to take to achieve that dream still remains a question. The panel discussion turned out to be an amazing and intriguing exchange of opinions and information that truly was an intellectual fest for all the spectators.