Centre pushes for cash free campuses(Digital economy/cashless economy

Centre pushes for cash free campuses(Digital economy/cashless economy

Context:

Public, private institutions to be within digital ambit

Introduction:

• The Ministry of Human Resource Development aims to make financial transactions completely digital in all higher education institutions.
• In this regard, the Human Resource Development Minister is likely to write to the heads of all institutions to shift completely to digital transactions very soon.
• The Centre aims to fully digitise all campus processes — including admissions, assistance, assessments, result declaration, admission, etc. — with all these processes going on an integrated IT platform

Rationale behind decision:

• The move will promote cashless transactions in all institutions including Central and State universities  like IITs, NITs, business schools etc.
• The move was a step towards cashless economy.

Cashless Economy

• No liquid money is used by the society. All transactions are done  by using cards or by digital means
• The people using the means of e-commerce, mobile banking or Internet banking for their purchase or for their transaction

Advantages of cashless economy:

Advantages for the society:

• Reduces the circulation of liquid money
• The black money or parallel money cannot be able to sustain
• The transaction process and purchase will made easy
• No need to carry cash. Just carrying the required cards or mobile banking will suffice.
• More sense of safety with a PAN protected card etc.
• No fear of being robbed unlike carrying cash and letting everyone know that there could be something worth snatching.
• Now labour get their payment in their bank accounts therefore minimum wages as per Indian Labour Law can be ensured.

 Advantages for the economy:

• Digital payments indirectly reduce expenditure in manufacturing currency notes and its transportation.
• Electronic transactions also help in curbing corruption and black money flow which in ameliorate economic growth.
• It becomes easier to determine how much was spent where, and one able to manage the budget.
• Cashless economy increase transparency in the system

Advantages for the government:

• The government can control the financial transactions in the society.
• More transparency and easy to track money laundering and other such activities.
• Helps to eliminate counterfeit currencies
• If the government finds a person guilty government can block his/her transaction.

Disadvantage of cashless economy:

• Higher risk of identity theft
• Cashless transaction system is not widespread due to lack of education and technology gap which is a matter of concern and must be addressed by government or financial institutions.
• Direct threat to cyber security and individual financial data.
• Increase in online banking fraud.
• As per the survey automation will cut 70,000 jobs in India.

Government’s initiatives towards cashless economy:

Vittiya Saksharta Abhiyan  (VISAKA)

• The Centre  had launched the Vittiya Saksharta Abhiyan  (VISAKA), financial literacy campaign, for digital financial literacy early in 2017, enrolling lakhs of volunteers from among students to train families in their neighbourhood to conduct financial transactions digitally through the BHIM app.
• They were also asked to go to major markets, talk to shopkeepers, vendors and merchants’ associations to help shift to digital transactions.
• As many as 2000 higher education institutions were also made digital as part of this initiative.

Other initiatives:

• The Digital India Programme is the flagship programme launched by the Government of India with a vision to transfer India into digitally empowered society and knowledge economy. The progrmme has three components: The creation of digital infrastructure,Delivering services digitally and Digital Literacy
• The government has come up with a rash of discounts and freebies on digital transaction
• The Unified Payments Interface(UIP)-the payment system that allows mobile-enabled money transfer between bank accounts is also a welcome step
• Many banks have launched UPI apps, the Bharat Interface for Money (Bhim), the common app that can be used by anyone who has a bank account with a linked mobile number. Bhim provides a smartphone front-end to make bank-to-bank payments.
• The Finance minister in his budget speech announced two schemes for promoting Bhim- a referral scheme and a merchant cash-bank scheme
• The government also unveiled two schemes –Lucky Grahak Yojana and Digi Dhan Vyapaar Yojana for customers and trades alike to promote mobile banking and e-payments.
• Finance minister Arun Jaitley proposed a slew of measures to hasten India’s movement to a cashless economy like ban on cash transactions more than Rs 3 lakh, tax breaks for the creation of a cashless infrastructure, greater usage of non-cash modes of payments and making Aadhaar based payments more widespread.
• The budget proposed to ban all cash transactions above Rs 3 lakh, in line with the recommendations of the Special Investigative Team (SIT) on black money.
• The budget also announced the setting up of a separate payments regulator within the Reserve Bank of India (RBI) to regulate the payment space. A review of the Payments and Settlements Act will also undertake, aimed at its overhaul.
• Aadhaar pay, a merchant version of Aadhaar-Enabled Payment System (AEPS), will be launched soon to enable those who do not have debit cards, mobile wallets and mobile phones to make digital payments.
• The budget also suggested additional cashless initiatives like Aadhaar-based smart cards for senior citizens.
• The budget also announced a computer emergency response team for the financial sector (CERT-Fin) to increase of digital transactions.

Conclusion:

Cashless economy is the prerequisite for developing country like India. As transactions done without cash leads to generation of receipts/invoices which brings recording of income generated leading to more transparency in the economy.  The dream of cash less economy can be achieved with sufficient infrastructure and planning that are required for supporting an economy like India.