This is a Sample essay on CASHLESS ECONOMY for Tier 3. Read it. Leave a comment or feedback.
Today, India is heading towards a Cashless economy. It is a state in which all or most of the financial transaction are done using digital means or plastic money (cards) such as Credit cards, Debit cards, Kisan Credit card, etc. In such an economy the circulation of physical currency in nation is minimal.
After demonetization of Rs. 500 and Rs. 1000 notes by Reserve Bank of India, government has given a boost to Cashless economy. As a result, government is encouraging people to engage in digital transactions for day to day tasks of financial nature.
Benefits of making a Cashless economy are very clear. There would be reduction of tax avoidance and tax evasion. Also, tax to GDP ratio will surely improve as digital money transfer leave a financial trail. Banks will hold more money so they can lend it to rising startups and small businesses. This will cause job growth. It will become hard for criminals to hoard black money and thus illegal activities like smuggling, trafficking and terror funding could be curbed.
Fake Currency in circulation could be easily picked apart and more transparency and increased efficiency is achievable. Once Cashless economy is widespread, there will be less dependency on banks and ATM’s and digital methods will become the normal. The plastic money and giving cashless will reduce cost of printing currency, cash handling and ATM operating. Elections would be cleaner and direct benefit transfer to the poor could be further implemented.
There are many challenges before the government. The lack of Internet to all and low Internet literacy or digital literacy is a drawback. Risks of Hacking of accounts and breach of cyber security is very possible. The wives and mothers in poor households have a tendency to store money for a rainy day but cashless economy comes out as a challenge to it. 90% of unorganized sector was cash for wage labourers.
Good steps by the government has been taken like licensing of payment banks, UPI (Unified Payment Interface), impetus to mobile transaction like launch of BHIM (Bharat Interface for Money) App and Digital Yojana make easy digital payments possible. There is need for digital literacy & Cyber Infrastructure but once properly implemented, it will benefit the country in long run and give boost to Indian Economy.
—————————–––—-———————————– End of Essay ———————————————————————-