Friends, I am sharing a post I had published on 26th May 2015, on FB, arguing the merits of moving towards a cashless economy. It seems, after an interminable delay, the Government has bought into my argument and more importantly acted on my suggestion 
2. Efficient Tax collection: Our country’s tax collection as a % of GDP is estimated to be between 10% to 17%. For many developed economies it is upwards of 25%. By moving to a cashless economy, government tax collection on both fronts – corporate and personal income tax will bump up. Over time Government can then lower both the corporate and individual tax rate leaving more money on the balance sheet of companies and in citizens’ pockets for discretionary spending.
3. Stimulating economy during recession: In a cashless economy, money would have to be kept under the overall supervision of the central bank. During recession, the central bank can stimulate the economy by imposing a negative interest rate on deposits. So it would be in the interest of depositors to spend money instead of keeping it in the bank.
4. *Commercials: Look at the paradox: Quite often it costs more money to print money than the face value of the money itself. Hence in a cashless economy, the commercials will always make sense because there will be no printing or minting of money.
The rising popularity of Credit cards, Debit Cards, contactless payment, electronic banking have already made us familiar with ‘Cashless’ economy. The government has to up the ante.
I hope I have convincingly argued my case for moving towards a cashless economy. It seems to be a win-win situation for all stakeholders sane a few. Here’s a clincher - eliminating the shadow economy will catapult India among the top-3 economies in the world behind USA ($18 trillion) and China ($11 trillion)!'
--------------
About the Author:
