Merits and demerits of cashless economy
A clean and growth oriented economy sets a future fate of any country where as a hazy and debt ridden economy can cause a disaster. Here, clean economy means an economy which is transparent and free from black money transactions.
Cashless economy is one of the pillar on which a clean economy can be built upon. There are many successful countries who have transformed their cash driven economy into cashless economy.
Not to go far, recently Manipur's Karang island has become India's first cashless island where all economic transactions will be carried out through digital mode.
According to a survey, Singapore has been ranked one for using its 61 % transactions out of total transactions through cashless mode
Merits
Transparency
A transparent economy is a true economy of any country. It reveals the actual economic position and growth. The biggest advantage of cashless economy is all its transactions are transparent, fair and traceable. An economy to flourish in real term, transparency plays an inevitable role.
Extinction of black money
Black money are those unaccounted money which is earned from an illegal sources and is beyond the purview to the tax authorities. Cashless economy binds such black money hoarders and dealers to get rid from such attitudes and compel them to use white money and pay their due taxes. Not only this, terrorism, abduction, theft etc can also be curtailed as black money was aggressively used to fund such illegal activities.
Currency counterfeiting
The biggest disadvantage of cash driven economy is duplication of its currency and circulating in different markets. It was observed that 20% of the total cash circulating in Indian economy are duplicate forged currencies. And such counterfeiting activities are carried out in all over the world. The cashless economy is the best solution to tackle such menace by using digital mode for all transactions.
Cashless economy surely can be a boon for a country but its loophole cannot be neglected.
Demerits
Cybercrimes
Increasing cybercrimes is surely a threatening loophole in cashless transactions. Hackers leapt out customer's account and transfer money to their account. No uniform protocol in cyber security jerk a nerve wracking fear among masses for using digital mode of transactions
Breach of confidentiality
Recently a breach in financial data affected several banks security features caused panic among masses. Many customers account and ATM cards were blocked by bank caused heavy loss to banks and disruption among people.
Lack of awareness
World's more than half population live in a penury who toil each day for their livings. Lack of education, basic amenities and awareness of digital transactions is major hurdles for a cashless economy.
Cashless system would be good for urban area not rural area.
Feasibility
The feasibility of cashless economy is undoubtedly a question also. For petty transactions like paying conveyance, buying groceries and daily goods etc are not feasible all the time. In contrary to availability of digital mode for transactions, some people are addicted to cash transactions and reluctant towards digital mode.
Nonetheless, cashless economy is surely a boon for our country.
-Arkadyuti
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