“Cashless Villages”, sounds interesting. But how has this concept evolved and how much can it contribute? Let’s figure it out. The word ‘cashless’, in recent times, came into being after the much sensationalized 2016 Demonetization of 500 and 1000 currency notes, claiming that it would crack down on the use of illicit cash to fund illegal activity and terrorism. The word cashless is characterized by the exchange of funds by cheque, debit or credit card or electronic methods rather than use of cash. It is an initiative by the government of India with a vision to transform India into digitally empowered society and knowledge economy. “Faceless, Paperless and Cashless is one of the professed roles of Digital India.” It is a vision by the Prime Minister of our country to make India a cashless society. In the 27th edition of ‘Mann ki Baat’ programme, Prime Minister said, “I know cashless economy is different. Why not move towards a cashless society? Need your physical support in this. I took the decision for the country’s poor, farmer, labor, deprived and those who are suffering. I reiterate that I need your support; I am positive that you will help me in this, take a pledge that you will be a part of cashless economy.” Pradhan Mantri Jana Yojana is a scheme started by the government of India in 2014. In this scheme financial inclusion of every individual who does not have a bank account is to be achieved. Earlier, the government of India had twice demonetized notes in 1946 and 1978. According to the 2011 census India has got over six lakh villages and 69% of the rural population resides in villages. To make these villages cashless will be a giant step towards progression.
These have been the villages to go cashless. Akodara, in Gujarat, being the first village to go cashless, followed by Dhasai, Maharashtra, Basti of Maner, Patna, Bind Toli of Kurji, Patna, Bihar, Lunara village in Jammu & Kashmir and Ibrahimpur in Telangana. Akodara in Sabarkatha district of Gujarat was the first village to go digital in 2015. When the entire country was facing crash crunch after demonetization, this village was more or less unaffected, considering it had already been digitized. This village was adopted by the ICICI Bank to go digital. There are 250 households. 1036 adults of the 1191 population have savings account. They had Aadhar Cards linked to their bank accounts. The village panchayat has access to the latest price of agriculture commodities on NCDEX (National Commodity and Derivative Exchange) via internet facility provided by the bank. They follow mobile banking for transactions. It was possible because this village has a literacy rate of 92% according to 2011 census. According to ICICI Bank CEO Chanda Kochar, financial literacy was the important criterion to select this village. Therefore before making a village cashless it is important that the literacy rate of the village must also be higher. This will help in increasing the literacy rate of the villages of the country. Dhasai, a small village in Thane district of Maharashtra became the first village of the state to go cashless. Bank of Baroda in collaboration with NGO Veer Sawarkar Pratishthan took initiative to make this village cashless and trained its residents about various methods of handling cashless transactions. Every villager including traders, fruit and vegetable vendors and others who provide goods and services are using cashless transaction methods. Ibrahimpur village in Medak district of Telangana was the first village of Telangana to go cashless. A village of population 1200 is equipped with credit cards for transactions. Lunara village in Budgam district of Jammu and Kashmir went cashless. Each household in the village has been trained to use EPS (Electronic Payment System). There are three villages of Bihar to go cashless. Bank of Baroda took this initiative for about 10,000 villagers for cashless transactions. It is also linking their Aadhar Cards to their Bank accounts. People claiming that cashless transactions in villages are not possible; these villages are a big example to prove them wrong.
Cashless villages will contribute to economy considering India’s rural population according to the 2011 census is 69%, which is more than half of India. However, it is important to educate the residents of village about the methods and benefits of cashless transactions and how it can help curb black money. There will be proof of transaction. Therefore, cases of bribery and fraudulency will decrease. It keeps history of their transactions so they can view their expenses in one go and plan the budget. On an average one out of seven notes in circulation are fake which has a huge negative impact on economy. RBI spent 27 Billion just on the issuing and currency management in the financial year 2015. Reduction in exploitation of the poor by middlemen will be there. It could be avoided if we go cashless. It will also pave way for national access to various mediums. Stained tobacco notes are unhygienic as we unknowingly give and take germs. Consumers can pay the exact amount without worrying about not having change or getting it back from the shopkeeper. In cashless economy there will be no fear of carrying cash around all the time. So, creating awareness about these benefits of going cashless should be done in villages.
The Government of India along with Reserve Bank of India has also taken various measures. They have provided license to payment banks. They have also been promoting mobile wallets. Mobile wallet allows users to instantly send money, pay bills, recharge mobiles etc. But RBI will have to further take further measures to make digital payments methods secure by and thereby make people have faith in the system. New bank accounts are being opened. There were considerably a large number of people in villages who did not have bank accounts. But after this initiative of going cashless, bank accounts are being opened. Various NGOs can contribute to villages going digital, as they can train people regarding the methods of cashless transactions. Some villagers are not aware about the safety and security of digital transactions so educating them about how these transactions are under the scrutiny of Cyber cell how it works should be done.
The traditional occupations in villages are agriculture, cotton industries, weaving, pottery and animal husbandry. Their common mode for transaction is cash. By going cashless there will be lesser chances of fraudulency as many of these may not have backup for their finances. It will also provide employment to various candidates for banking sector and NGOs.
The step of going cashless will not only add to economy but also boost the confidence of the villagers as they will have their bank accounts opened, they will be doing cashless transactions by using digital means. Many old age people will also have a realization of financial security after having their personal bank accounts. This not only serves benefit to the villagers but helps in overall economic development as many sectors are included like banks, telecommunication department. It will act as a significant step towards propelling India to emerge as a cashless society. Mahatma Gandhi said that, “the soul of India lives in its villages”. If we empower our soul then the whole body will reap its benefits.