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  • An economy whose all transactions are done by cards or digital means can be termed as cashless economy
  •  India has an abundant circulation of the currency notes. It is far higher than the other countries. India circulates 76.47 billion currency notes
  •  Cashless or the digital transaction in the country is mere 5 percent of the total.
  • Even in malls which are visited by people who have credit cards seems to transact in cash


  • It can reduce tax avoidance since every transaction goes through an institutionalised mechanism.
  • It can curb the black money
  • Huge amount of money is spent on cash creation and transportation.this can be avoided
  • It helps in implementing welfare schemes more effectively because the fund is directed directly to the beneficiaries account.The role of middlemen can be reduced
  • Will reduce real estate price because most of the transaction in real estate is done through black money
  • The speedy transaction which in turn helps more vibrant economic activities.
  • reduced the cost of maintaining ATM
  • Ill effects of fake currency can be eliminated. As in country one in seven notes that are circulating is fake, which has an adverse effect on the economy.
  • When India become cashless sponsored terrorism will take a back seat.


  1. Security-cyber attack, fraud and power outage
  •  The Cashless economy can be a nightmare when it comes to security. All your transactions will be done digitally.
  • You will be prone to cyber attacks like hacking. Hackers can hack your sensitive information like password, credit card number etc and leave your account with no money.
  • Even your personal computer is compromised. You can save yourself from fraud but it is very difficult to save from a cyber attack.

  • Last but not the least, The intermittent nature of power supply compromises the efficiency of the cashless economy.
  • 2.Less paper cash means bad for certain sector


    • Several sectors in the economy even now depend upon high-level currency transaction.
    • Sectors like Real Estate, jewellery, retail industry, restaurants and eateries, cement etc will be adversely affected which in turn will affect the people employed in the sector and economy itself.


    • Recent issues like data leakage from Hitachi ATM machines points towards an insecure transaction system. 
    • A strongly secured system must be put in place before shifting towards the so-called ”Cashless economy”.

         4. problems for poor

    •  More than 50 percent of India is poor and most of them does not come under any banking system
    • And the digital penetration is still snail fast. According to the WDR report 2016 digital divide in the country is still huge and a sudden change to a cashless economy without proper institutional and technological systems will result in “INCLUSION ERRORS”. 



     1. Network connectivity:

    • India has an average internet speed of 3.5 Mbps, which is far lesser than the world average of  6 Mbps. Causing delay and difficulty.
    • Issues with network connectivity were already reflected post demonetisation due to heavy traffic in online transactions.The card machines stopped working and this had led to difficulty in transaction

     2.. Internet cost

    • In India, the cost of internet is substantially high. The absence of public wifi coupled with costlier internet packs amplifies the issues. Internet connectivity is needed for even e-wallets.
    • In order to make transactions smooth one need to reduce the cost of data charge and wifi should be placed in public places.

    3.Not Everyone can Afford a Smartphone.

    • More companies have come up with affordable mobile price but still this price is not affordable for many of the poor people in India .so government could come up with schemes that would make smartphones affordable at cheap price

    4.Lack of technological know how

    • The present generation is well aware of the use of gadgets and online transaction but this is not the case with the people above the age 50 group.They depend on their children for online transactions.Before promoting cashless society one need to educate everyone about the how to use technology aided money transactions

    5.Internet blockage 

    • When some internal disturbance occurs like mass scale armed rebellion etc it is a convention to block the Internet thus it would then be difficult to make different transactions

    6.Not enough bank accounts

    • Most people still do not have bank accounts. Most often there is just one account per family which also limits the number of cards people can have individually. A family of even four people cannot be dependent on just one card for all household expenditure.

    7.Other concerns include

    • The government is pushing very strongly for a cashless society. After the demonetisation move, several initiatives have been seen to further encourage going cashless. However, while cashless transactions are a convenience and the future, it is being pushed without addressing critical concerns.
    • The government’s demonetisation move might have warranted an increase in transaction activity on digital wallets, but measures to ensure the underlying cyber security parameters for digital payments is still kept largely under the ambit of the Information Technology Act. India lacks laws to protect consumers if they lose money during digital.
    • The electronic infrastructure space is also still under-developed in India and technology governance is weak. The e-infrastructure today is woefully inadequate to serve the people in semi-urban and rural areas. Internet penetration is low at 30%, and smartphone penetration lower at 17%.
    • Anomalies also exist in the form of gaps in the regulatory mechanism of credit and debit cards, and mobile wallets. For instance, the discount rate, charged to a merchant accepting card payments, and sometimes to consumers, is by the banks themselves, and not by the regulator — the Reserve Bank of India, in this case.