India Makes a Bold Move to Combat Corruption and Black Money
What this means for the mobile world?
In India, cash is king. Or, at least it was. Most of the rural economy in India is powered by cash transactions but a recent ban, declared by Indian Prime Minister Narendra Modi on November 8th, on Rs. 500 and Rs. 1000 notes shifts a cash-dominated society towards card transactions. The decision to withdraw the notes from circulation is a way to flush out crores of rupees worth of unaccounted money, or black money, into the mainstream economy and curb corruption.
But as many hold the now-banned Rs. 500 and 1000 notes, a scheme was introduced to implement the strategy. Those who hold the notes are faced with two options: they can either exchange the notes for lower denominations but with a limit of Rs. 4000 rupees for a certain period of time, or they can deposit it into a bank account without any restrictions or limitations.
The digital economy
The idea behind this bold statement is for India to shift towards a cashless economy by pushing people towards creating a bank account. Electronic transactions are a way to improve financial transparency by locking out money that is unaccounted for and making it apparent for tax purposes. The digital economy is the biggest beneficiary of this move as India shifts away from cash and moves towards online banking and digital transactions. The boldness of the ban, move towards bank accounts and shift away from cash transactions are all clear signs of the near future of digital India.