Indian Economy, traditionally referred to as cash based economy, is cashless nowadays. On November 8, 2016 the most popular and most circulated- Rs. 500 and Rs. 1000 currency notes were declared to have lost its status as legal tender. The revolutionary movement was adopted by the Prime Minister of India- Narendra Modi to weed out the evils of black money in the country. With this move, came up many opinions in favor and also against the crusade highlighting the pros and cons of the same.
But a notable transformation that is taking place gradually is Digitalization. India has suddenly seen an enhancement in online transactions, usage of mobile wallets, card transactions to meet their day to day needs. Below are some instances which show that demonetization has opened up doors for digitization.
India’s first ‘Digital and Cashless Village’
India is a cash based economy. This sudden idea of Demonetization has surely popped out difficulties for the common men. But it didn’t actually sway some people at some places. The village named Akodara, 60 miles from the northern city of Ahmedabad which was adopted last year by ICICI bank under ‘Digital India’ program has set a perfect example. Most of the 1200 people living there have heartily welcomed demonetization by embracing online transaction. They have adopted mobile banking as their perfect mate for all their daily dealings.
Massive upsurge in Online Traffic
India is more depend on cash unlike other developed economies, using online and cashless mode of payments. But with the recent act of demonetization, the online rush has amplified. As per the reports, Paytm experienced a 1000 percent growth in money added to wallet and a 400 percent growth in transaction value of offline payments. Whereas, Ola Money reported over 1500 percent increase in recharges across the 102 cities of its operation since 8:30 PM on 8th November 2016 till 12:00 pm. Razorpay witnessed a 150 percent spike on the morning after the decision was announced, which by afternoon, shot up to 200 percent.
Offline Retailers going digital
Not only online platforms like Paytm, Olamoney and Razorpay are encouraging people to adopt the online mode of transactions but also the offline retailers are encouraging the people. The move is supported by many of the big retailers by arranging cashless payment mode for the customers. For instance, Kishore Biyani Future Group CEO which operates Big Bazaar, the largest retail chain in India is encouraging people to make payment through cards. They are also planning to introduce cheque, debit cards, digital payments and gift cards to support the movement and encourage the people to ‘Go Digital.’
Demonetization should not be looked as a roadblock but instead as a fuel accelerating towards Digitalization, an opportunity which is opening up the ways to go digital and boost the progress of the economy. There are only advantages of demonetization in the long term. The government is taking all the necessary steps and actions to meet the currency demand and ensure the smooth flow of new currency.
Written By: Faber Ramya Pillai