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Opinion: Why PM Narendra Modi's ambition of converting India to a cashless economy is still a dream to come true

Opinion: Why PM Narendra Modi's ambition of converting India to a cashless economy is still a dream to come true

Politics and Democracy Bureau

Our Prime Minister Narendra Modi has been encouraging Indian citizens cashless. He has been vocal about this for quite some time and asking us to carry out cashless transactions. 

In order to support PM vision, the government of India is working tandem. The government has launched a major social-media campaign to promote cashless transactions, which include e-banking, debit and credit cards, card-swipe or point-of-sales (PoS) machines and digital wallets. 

The Prime Minister himself has assured every citizen that the cashless economy is secure. In his previous Mann Ki Baat on November 27, he urged citizens to learn how to effectively use the apps of various banks on your phones. The PM has also encourages us to have a leadership role to play in taking India towards an increasingly digital economy but still but there are various obstacles in the path, which needs to be addressed.


We surpassed US in internet users but that's not enough!

We feel delighted and closer to PM Modi's dream when we get to read facts like Indian internet users have surpassed a super power like the United States. But then another news comes which says India's Smartphone ownership and internet penetration remain low.

Also, estimates say 90 percent of all transactions are in done in cash in India. Things like these certainly thrash our dreams to see a cashless society soon.

According to an estimate India's merely 27% of citizens are on the internet, which is somewhere around 34.3 crore users. However this is good enough number to surpass internet users in the US but internet penetration rate in India is as low as 27%. If you talk about global medium of internet users in a country, it is somewhere close to 70 percent of total population. According to a report released by IndiaSpend, India is behind most major economies and stands behind smaller countries like Nigeria, Kenya, Ghana and Indonesia, among other countries. 

Put another way, 73 percent of remaining Indians, or 91.2 crore, do not have access to the Internet. 

Among 27 percent internet users in India, just 13 percent live in rural India (or 10.8 crore of 83.3 crore who live in villages), which has been worst hit by PM Modi's note ban.

While in modern India or the urban cities, 58 percent of people have access to the Internet. 

How many of us use Smartphones in India?

If you are reading this piece, you have good chances that you are using smartphones but there are only 17 percent Indians, who use smartphones in the country.

For PM Modi's dream to come true, a smartphone is a prerequisite for accessing majority of banking applications. You would be surprised to know that only seven percent of Indians in low-income families own a smartphone; while the figure for wealthier families is 22 percent. 

Internet connectivity is among major roadblocks

According to TRAI data, India had 102 crore Wi-Fi connections but after scrubbing the data of inactive and duplicate connections, our country has 93 crore active users. 

India has average time to load a page on a Smartphone is 5.5 seconds as compared to 2.6 seconds in China, 4.5 in Sri Lanka, 4.9 in Bangladesh and 5.8 in Pakistan. Internet speeds is likely to be a major roadblocks to make users to use the internet for banking transactions.

Not enough card-swipe or point-of-sales machines 

We have 856 PoS machines for nearly 1 crore Indians, while Brazil -- with a population 84 percent lower than India -- had nearly 39 times as many machines (32,995). 

So, it is would not be wrong to say that PM Narendra Modi's ambition of converting India to a cashless economy is a far distinct dream to come true.

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