Government Schemes State Government Yojana

Cashless Transaction Scheme

Mukesh Jindal
Written by Mukesh Jindal

Prime Minister Narendra Modi said the government will soon operationalise a strong law to effectively deal with ‘Benami’ properties and this was just the beginning. Vowing to carry forward the war against corruption and black money post-demonetisation, this is a big change in the history of India introduced by the Prime Minister.

The Prime Minister appeared hopeful that the nation will soon adapt to the digital mode of payment. With an aim to achieve cashless economy, Prime Minister Narendra Modi also unveiled two schemes —”Lucky Grahak Yojana” and “Digi Dhan Vyapaar Yojana” — for customers and traders alike to promote mobile banking and e-payments.



• The cashless transaction is only possible with white money which renders the black economy invalid. Black money is a major problem in India and the fact that less than 5% of all payments in the country are made electronically has not helped matters. The number of tax evaders in India is phenomenally high. Cashless transactions will help India get rid of this perennial problem because in financial institution based economy there are always transaction trails which make it extremely difficult to avoid taxes.

• Real Estate prices would drop considerably because a huge share of the black money is invested in this sector which inflates the prices in the real estate market.

• The expenditure incurred by the RBI in printing notes would be considerably reduced. In the year 2015, the RBI spent Rs 27 billion in issuing and managing currency notes.

• Prostitution, drug trafficking, terrorist financing, money laundering and many such activities are carried out only in cash. Cashless transactions would make the operation of such businesses impossible for the criminals.

• Cashless transactions can be easily supervised by the government which will enhance revenue collection and consequently increase the funds to carry out developmental activities.

• The citizens would no longer have to carry liquid cash with them. It would be sufficient to carry mobiles, cards or tablets.

• The majority of election funding in India is made through black money cutting across the political spectrum. Cashless transactions would make it impossible for the political parties to spend thousands of crores of unaccounted money for their election expenditures. The deplorable practice of buying the votes by distributing cash and alcohol to the people would also be eliminated. True democracy would be finally at work.

• The welfare programs that suffer from the chronic problem of corruption and non-implementation would be greatly benefited. The money would be directly transferred to the beneficiary’s account and can also be easily traced by the government. The people would no longer be at the mercy of the corrupt government officials who have exploited the poor for far too long.

• Counterfeit currency that is pumped into India to wage an economic war by the enemy countries would be eliminated by a cashless society.


• Many poor people do not have bank accounts. Although the Jan Dhan Scheme launched by the government succeeded in bringing millions into the banking system, the process is not complete and many of the accounts are non-functional. The government has to fix this problem and bring the entire poor and marginalised section into the banking system.

• The small retailers in India deal only in cash and have not been able to invest in the digital infrastructure.

• The taxes, surcharges and the fees charged on digital transactions need to be made liberal in order to encourage the people to adopt the practice. Otherwise, the public would not be willing to move towards a cashless society.

• Hacking and cyber theft are grave dangers that plague the digital world. Hackers can steal information and money from anywhere in the world. The challenge before the government is to put strong security systems in place to protect the online transactions from the hackers. Researchers have shown that it is easy to crack the PIN number and gain access to the virtual wallet by using a software if the cyber criminal gets possession of the victim’s phone.

• The Indian public is not much educated with regards to the benefits of using cards or online payment methods. A vast majority prefer using cash as a convenient method of payment. Even the card holders consider cash to be a quick method and easy method.

About the author

Mukesh Jindal

Mukesh Jindal

My name is Mukesh Jindal, and I am from New Delhi, India. I am an engineer by profession. I am employed by an IT company in which I work. My topics of interest include technology, mobile, and apps.

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