Demonetising Rs 500, Rs 1,000 notes: Digital payment companies hail PM's decision -Governance Now

Demonetising Rs 500, Rs 1,000 notes: Digital payment companies hail PM's decision

But will this actually benefit digital payment and wallet companies?

GN Bureau | November 9, 2016

#Rs 100 #Rs 1 #000 #Cashless Economy #Black Money #Bank Notes #Corruption

Digital payment companies have hailed PM’s decision of banning high denomination currency notes (Rs 500 and Rs 1,000) as a major step towards cashless economy.

“This is the time to say no to cash and so do to corruption,” Vijay Shekhar Sharma, founder of India’s largest digital payment service PayTM, told Forbes India.

Meanwhile, popular digital payment platform Freecharge summarised the government’s decision by tweeting, “Cash is so yesterday”.

Calling it a historic moment, Bipin Preet Singh, CEO of MobiKwik, in a statement to media, said, “Within a 50 day period a billion Indians will change their payments behaviour - we will move from cash only to a cash-free economy. This is a strong step taken by the Modi government and will benefit the growth of digital payments and digital banking in India. We are excited to be a part of this historic moment."

“The move will create a great hook to habit for adopting wallets in our everyday lives,” said Sunil Kulkarni, Deputy MD, Oxigen mobile wallet. He added, “Oxigen has more 200,000 touch points across India which load cash. This can facilitate people to convert their cash to digital in their wallets. So the adoption is not restricted to tech savvy consumers in Urban and tier 1 cities bit in tier 2 and rural areas where we have also our footprint.”

But will the decision of the government actually benefit digital payment and wallet companies? The government, first of all, is not doing away with cash. So this decision cannot be hailed as a move towards cashless economy. In place of the banned Rs 500 and Rs 1,000 notes, new notes of Rs 500 and Rs 2,000 will be issued.

“This will not take us closer to the cashless world. This could be viewed as a way of pushing the post-cash electronic payments world forward. However, the institutional foundations of the new world have to be laid, and only at the tail end of that process, a certain use of coercion works okay,” Ajay Shah, professor, National Institute of Public Finance and Policy (NIPFP), writes in his blog.

“This is a surgical strike against the people who have inventories of the old notes that can't be shown to the authorities. Those people will find ways to fence those suitcases of cash, and suffer monetary loss in the process,” he writes further.

Comments

Other News

India faces critical shortage of skin donors amid rising burn cases

India reports nearly 70 lakh burn injury cases every year, resulting in approximately 1.4 lakh deaths annually. Experts estimate that up to 50% of these lives could be saved with adequate access to skin donations. A significant concern is that around 70% of burn victims fall wi

Not just politics, let`s discuss policies too

Why public policy matters Most days, India`s loudest debates stop at the ballot box. We can name every major leader and recall every campaign slogan. Still, far fewer of us can explain why a widow`s pension is delayed or how a government school`s budget is actually approved. That

When algorithms decide and children die

The images have not left me, of dead and wounded children being carried in the arms of the medics and relatives to the ambulances and hospitals. On February 28, at the start of Operation Epic Fury, cruise missiles struck the Shajareh Tayyebeh school – officially named a girls’ school, in Minab,

The economics of representation: Why women in power matter

India’s democracy has grown in scale, but not quite in balance. Women today are active participants in elections, influencing outcomes in ways that were not as visible earlier. Yet their presence in legislative institutions continues to lag behind. The Nari Shakti Vandan Adhiniyam was meant to addres

India will be powerful, not aggressive: Bhaiyyaji

India is poised to emerge as a global power but will remain rooted in its civilisational ethos of non-aggression and harmony, former RSS General Secretary Suresh `Bhaiyyaji` Joshi has said. He was speaking at the launch of “Rashtrabhav,” a book by Ravindra Sathe

AI: Code, Control, Conquer

India today stands at a critical juncture in the area of artificial intelligence. While the country is among the fastest adopters of AI in the world, it remains heavily reliant on technologies developed elsewhere. This paradox, experts warn, cannot persist if India seeks technological sovereignty.