The path to cashless and less cash in the economy has been doing the rounds for several years now. However, the real impetus picked up with demonetisation in November 2016. The move to demonetise has necessitated the shift to digital money, in turn resulting in a less cash economy. There are several benefits of going digital with money or having less cash in the systems—convenience of transactions apart, the less cash or digital cash system addresses the safety concerns faced over transacting with cash. At a broader level, the move restricts the growth of the parallel black economy, brings in more people under the tax net and ensures efficient handling of money in the market. With digital money playing a significant role combined with the linking of Aadhaar with the PAN, the proliferation of cash is on the wane. Moreover, by limiting cash transactions to a maximum of Rs 2 lakh, there is little room for cash to be stashed. The efforts towards less cash and cashless transactions will become the popular modes of financial transactions.
Impact: For the common man, there is security and convenience while spending more safely. For merchants, there is decrease in costs and access to a larger customer base.