Talking Point: Note ban propels India to a digital economy: NITI Aayog
Within three years, cash machines in India will be completely irrelevant. This bold prediction of NITI Aayog CEO Amitabh Kant was greeted with a mixture of enthusiasm and scepticism by the audience at a session here at Jaipur Literature Festival. “We’re in the middle of a major disruption,” said Kant.
By : migrator
Update: 2017-01-22 17:22 GMT
Jaipur
“Presently, 85 per cent of transactions are in cash, which creates more opportunities for black money. But we have seen extraordinary growth in mobile phones, meaning the infrastructure for a cashless economy is there.”
Aruna Sunderarajan, newly-appointed Secretary of the IT Ministry, said: “Once the four big telcos swing behind digital banking, which will happen next year, the cashless economy will grow exponentially. Look at the example of Kenya - it’s less banked and less advanced technologically, yet 50-60 per cent of financial transactions happen on phones.”
Ashok Wadhwa, banker and CEO of Ambit Holdings, was also sceptical about the pace of transition to a cashless economy. “No question that’s the destination, but things don’t always happen that quickly in India. It took a decade to open up the stock market in the 1990s. I personally think the transition to a cashless economy will also take longer.”
Moderator John Elliott, author of several books on India, also seemed sceptical. “I can’t even get internet in central Jaipur. How is this going to happen in three years?”
Kant retorted: “It will happen because technology will make it so easy; even you can use it, John.”
Sharma interjected: “If it was so easy to use, why did the government have to take away 85 per cent of all cash? Was the shock of demonetisation really necessary?
“It enabled the push towards a digital economy in a much quicker way,” argued Kant.
“Disruptive policies have been responsible for rapid change before in India”, agreed Wadhwa. “But we need to get the right internet infrastructure in place. And we need to remove the bureaucratic paperwork for people to set up new accounts.”
Is the cash economy so dirty? asked an audience member. “India has a $2 trillion economy, and a $1 trillion black economy,” said Kant, noting that to make it a $10 trillion economy, black economy had to be eradicated.
A poll was conducted on whether digital economy had harmed the brick-and-mortar businesses. About 57 per cent of the participants believed it had.
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