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Why it is really tough for the Modi government to implement the cashless economy

Cashless Economy: The Centre BJP government, led by NAMO, is leaving no stone unturned to make the people aware of the cashless economy and what its importance is and even any individual can’t deny its importance.

Recently in an election Rally PM Shri Narendra Modi appealed to everyone to get trained and train others on how to use mobile for doing cashless transactions.

'मेरा मोबाइल, मेरा बैंक, मेरा बटुआ' : बिना कैश के भुगतान, मुमकिन है.. https://t.co/u8xjpAve0r pic.twitter.com/5qLBmvYsew

— BJP (@BJP4India) December 1, 2016


Further on Sunday, in the monthly radio programme, he said, Learn how this digital economy works. Learn the different ways you can use your bank accounts and internet banking. Learn how to effectively use the apps of various banks on your phones. Learn how to run your business without cash. Learn about card payments and other electronic modes of payment. Look at the malls and see how they function. A cashless economy is secure, it is clean. You have a leadership role to play in taking India towards an increasingly digital economy.

However the ground realities look much different, analysing which we can say, why it is really tough for the Modi government to implement the cashless economy

Internet Users

In India, currently most of transactions, around 80% transaction is done by cash. India is having the list of second largest Internet users, with estimates of around 27% Indians use internet. In another way 73% Indians do not use internet do not have internet itself. Implementing such an idea and making more and more people use internet for transaction and leave the cash business will be a great pain for the Modi government. Especially for the small shopkeepers it is a great way to do transition in case and avoid paying the tax.  


People use different form of internet, based on the devices they use and money they can afford. Many use 2G, 3G, and 4G, the different internet bandwidth. Say for someone, bought a mobile device four years back, now his device will not support 4G connection at the present time and it will be tough for that person to really use many of the transactions apps for being cashless. Out 1.02 billion mobile subscriptions, but only 15 percent have broadband internet. India has 930 million (90%) active subscribers, according to this November 2016 TRAI report. Of these, 154 million subscribers (15 percent) have broadband connections (3G + 4G).

Machine availability: PoS machines

The use of PoS machines is much less in compare to other countries. Also seeing the population, this must have been much higher. In cities like Ranchi, Patna and many other capital cities, the shop keepers do not try to use it or do not want to use it. As per the figures obtained from firstpost. 856 PoS machines per million Indians: There were 1.46 million PoS machines in use in India

Looks like NAMO’s dream of cashless economy is a distance dream and harder in reality then on face book or twitter by the Modi government.