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  1. Cashless economy: The transition may not be as easy as Narendra Modi govt believes it to be

Cashless economy: The transition may not be as easy as Narendra Modi govt believes it to be

While the government is looking to stir-up the cashless economy, recent numbers from consumer research firm PRICE show that India has a long way to go.

By: | New Delhi | Published: January 14, 2017 6:12 AM
Demonetisation, Cashless, Cashless Economy, Narendra Modi, Modi Governement, Digital, Digitisation, Digital Payment, Cash Crunch, Budget Rising disposal income, emergence of a large base of millennials and the tag of the fastest growing economy will also see Indians adopt more and more smart devices in the coming year. (Reuters)

While the government is looking to stir-up the cashless economy, recent numbers from consumer research firm PRICE show that India has a long way to go. Analysis of the household survey data from 2015-16 shows that of the total households only 22% were connected. Even of these the connectivity in rural areas was just 16%, not even half of that of urban areas at 35%. But the really surprising data point is that even the top 1% of the population had only 61% of the households connected.
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Moreover, another set of data shows that of the R65,686 billion spent on expenditure around 90% of the transactions were in cash, with only 10% of the population opting for non-cash use. For a country, where there is no infrastructure and people still feel more comfortable transacting in cash—68% said that it was more convenient as against 47% claiming the same for cards and wallets—the transition may not be as easy as the government is holding it out to be.

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