LIST OF FIGURES

FIGURE NO. FIGURE EXPLANATION PA

GE
NO.
8.1 Pie chart showing the age group of people 52
8.2 Pie chart showing the percentage og gender of 53
respondents
8.3 Pie chart showing the percentage of ocupation 54
done by respondents
8.4 Pie chart showing the percentage of respondents 55
if they support cashless econonmy
8.5 Pie chart showing the exact reeason why 56
respondents support cashless economy
8.6 Pie chart showing the percentage of respondents 57
the mode they use for online payments.
8.7 Pie chart showing how frequently respondents 58
use online payments
8.8 Pie chart showing most preferred mode of 59
payment by respondents in the case of high value
transactions
8.9 Pie chart showing if respondents think Inida is 60
completely ready for cashless economy
8.10 Pie chart showing the percentage what are 61
hurdles respondents think India is going to face
while its road to cashless economy
8.11 Pie chart showing the best way to have cashless 62
economy
8.12 Pie chart showing if respondents will be 63
comfortable without cash
8.13 Pie chart showing the percentage of respondents 64
they feel are safe while doing cashless
transactions
8.14 Pie chart showing the percentage of respondents 65
change their passwords, PIN
8.15 Pie chart showing if respondents store their card 66
details on mobile, tabs, laptops
8.16 Pie chart showing if people think government 67
should promote more cashless payments
8.17 Pie chart showing if reduce of notes will affect 68
society
8.18 Pie chart showing whether india can become 69
complete cashless when other developed nations
are not completely cashless

7
 EXECUTIVE SUMMARY

The topic of project study “Study on cashless economy and its impact on society with
reference to Navi Mumbai” is the study about the cashless transactions which came into
limelight mainly after demonetization where the high currency notes of Rs. 500 and 1000 was
banned from 8th of November, 2016. This gave India a huge boost and very first baby step to use
cashless transactions.

This study focuses on cashless economy like what exactly is cashless economy all about, what
are the ways of achieving it also the study says about the various initiatives announced by
government for cashless transactions and the prospects and challenges of cashless economy. This
report also helps us in understanding the different modes of online payment/transactions like
banking cards, mobile wallets, UPI etc. all the major online payment methods in details. Also,
the impacts of cashless economy is being discussed in details like what will be the impact of
cashless economy on various sectors of the nation and what is the future of cashless economy in
India.

This study also contains research methodology where a survey was done in Navi Mumbai and its
subareas where a total of 100 respondents answered the questionnaire related to cashless
economy and transactions.

At last, findings of the study and suggestions have been provided that what exactly is to be done
to have India as a cashless nation where no. of suggestions has been provided in the report.

8
 CHAPTER: 1
INTRODUCTION

9
 INTRODUCTION

The Government implemented a major change in Indian economy on 8 th November, 2016 that
was to ban the complete use of high currency notes of Rs. 500 and 1000 which is popularly
known as demonetization.

Demonetization lead the way of something new on Indian economy the population of 1.2 billion
country is moving towards a cashless future is it really possible to convert such a huge country
into cashless we will find it later in this report.

1.1What is cashless economy?

A cashless economy is one in which all the dealings are done through electronic means such as
debit or credit cards, Immediate Payment Service, National Electronic Funds Transfer etc. The
circulation of physical currency in cashless economy will be minimum, the Indian economy
currently continues to be driven through 5% of all payments that happen electronically, the more
and more use of electronic means of transfer of funds, or other things carries out to be India’s
development and modernization of India’s payment system.

The essence of system is to shift the economy from cash based economy to cashless one, the
main aim of going towards a cashless economy is to get rid of corruption, or to make country
more advance where the world is going in many countries cashless transaction is common it is
said that Belgium is the most cashless country or economic in the world with 94% using cashless
transactions. The policy also aims at improving the effectiveness of monetary policy, managing
inflation in the economy, maintaining stable prices

The Government is working on various levels to reduce the dependence of cash Prime Minister
Narendra Modi introduced various schemes for both the customers and for traders to promote
mobile banking and e-payments. To support cashless economy it’s important for the Government
to make the habit of people of using the modes of e-payments. Government encourages
transactions like mobile banking, Ru-pay cards, UPI, USSD these are the means of digital
payments Government has also introduced the aadhar based cash payment system this is mainly
for those who don’t have cards or mobile phones. Reducing cash dependence is of many reasons
one of the main reason is to curb black money, illegal transfers can’t be made without paper
notes, curbs illegal activities all together, also it reduces terrorist activities in many parts of the
country. There are various schemes that the government has introduced and the incentives done
by the Government to increase the use of cashless transactions and boost the cashless economy
in India.

1.2 Problems with Current Indian Economy

 The current Indian economy is quite fragile and unstable.

10
 A lot of black money is in India, as already said that the main idea is to bring cashless is
to remove all the black money which is being used in many ways to bring better stability
and reputation to Indian market and economy.
 Improper taxation that is the reason GST was introduced in Indian economy as there will
be only one tax under the country.
 Deteriorating infrastructure is also a problem in current economy in business, healthcare
and infrastructure there has been many reports of power failure in major cities of the
nation which includes the capital of India New Delhi, Bengaluru, Kolkata etc. With
Government moving towards a future of cashless economy, it will be interesting to see
how the Government improves all these sectors of Indian economy, it is a major
challenge to overcome but not difficult.
Education sector is also a major cause of worry as this sector is backward with 72%
literacy rate, with the introduction of cashless transactions it is important for all states to
have a proper literacy rates.

1.3 Government Initiatives to encourage cashless economy

 All cash counters which are there in the Government offices should put up BHIM-UPI
QR codes for accepting digital payments which will boost the digitalization and minimize
the use of cash in Government offices.
 Cash counters can send an indent to customers phone to enable payment through UPI.
 UPI is one-touch transaction which is used for transaction of money between the parties
through a ‘unique virtual address’, since its launch UPI is adapted by various banks
fintech companies. The BHIM (The Bharat interface for money)is an extension of UPI it
is a technology which was launched in December 2016, one month after demonetization
 Cash counters at the Government offices are major sources of payment , by use or putting
of QR codes requires face screening of the customer as well as user, the idea is to
minimize the use of cash and use digital payments to boost the cashless transactions and
economy.
 POS machines in villages expansion of the digital payment in rural or village areas, the
Government through NABARD extended financial support to enable 2 POS devices each
in more than 1 lakh villages with the criteria of population of less than 10,000. These
POS were deployed at cooperative societies, milk societies etc. This benefited the farmers
of more than one lakh village covering more than 75 crore population who will benefit to
transact cashlessly in their villages.
 Rupay Kisan Cards for farmers the Government also introduced the scheme for farmers
through NABARD which supported Rural Regional Banks and Cooperative banks to
issue “Rupay Kisan Cards” to more than 5 crore Kisan Credit card holders to enable them
the facility of cashless transactions at POS machines or Micro ATMs.

11
  Government announced discount of 5 per cent for paid services for railways passengers
which included was catering, accommodation, retiring rooms etc if these all
accommodation was booked by digital means, all the passengers travelling through
railways availing these services got benefitted.
 Government gave discount on the policies which were sold online which meant that
public sector insurance companies provided incentives, by the way of discount or credit
upto 10 per cent of the minimum in general insurance policies and 8 per cent policies in
new life policies of life insurance corporation customers availed benefit through the use
of online policies which sold through customer portals, and the payment was made by
digital means.
 Government cancelled out the transaction fee on digital payments to use of digital means
and boost the cashless economy of the nation. Government ensured that that there is no
transaction fees for consumers and all expenses should be borne by Government offices
or departments.
 There is no service tax on digital transactions for transaction upto RS. 2000.
 Railways passengers which bought the tickets online, Government gave them free
accidental insurance cover upto Rs. 10 lakh. It is now common that many passengers are
buying online tickets for railway journeys, almost 65% of them are buying online tickets.
 Government gave 0.75% discount on government fuel if the price reduced or increase
customers paying through digital means will get that discount, although many customers
are still buying fuel by using cash system, this is area where Government needs to bring
more iniatives
 Getting more vehicles to adopt FASTag.
 Push to National common mobility card in metros to cover common transport and
schemes to entertain the customers, continual digital evolution is the key to success for
cashless economy.
1.4 Challenges of cashless economy

Government’s decision of demonetization drive is supposed to benefit the country, but there
are certain challenges that needs to be dealt properly if the nation has to see a change in the
economy of the country, some of the challenges of cashless economy are as follows:

 Digital literacy: Only the high class or elite class people has a good knowledge of the
digital means like how to use, when to use, implications etc,half of the country do not
know how to use computer, so digital literacy improvement is major challenge before
going to cashless economy.

 Improvement of infrastructure: Government needs to improve the infrastructure in

many areas which includes in public and private sector both, which includes 24*7
internet, free WiFi everywhere, proper electricity in rural areas as well as urban areas.

12
 Without, proper infrastructure it is difficult to get digital transactions and going with
cashless as what will happen if in the middle of transaction there is power failure or of
the digital means are not working.
 Security: Security is the matter of concern in cashless transactions, as there are lot of
cyber attacks in India, so the government needs to adapt proper security for cashless
transactions, especially in the banking sector.
 Resilience: This is a big issue, if a country does not have a cash payment option then
what to do if the cash supporting system will be unavailable if the connectivity fails then
there is a risk of whole system shut down without a proper backup options.

1.5 Prospects of cashless economy

 The JAM infrastructure is reaching every remote corners of the country or to every
citizen of the country to help going cashless transactions, almost more than 24 JDY jan
dhan yojana accounts a government scheme,127 Aadhar identity cards, 90 million mobile
phone users are in India so JAM infrastructure can be used to promote cashless
transactions.
 Number of credit and debit cards holders are to be increased to 25.5 million and almost
654 million respectively, demonetization drive has forced people to learn online
transactions.
 More people have started using RuPay debit cards and Aadhar for digital transactions,
this will help to facilitate a less cash economy.
 With increase of mobile banking applications, various applications of different banks the
use of these applications are growing and is expected to minimize the use of cash.
 A large number of government transfers are made through JAM mode which will help to
get people about the awareness of digital transactions.
 NPCI has promoted Aadhar based payment system which has people in cashless
transactions and newly scheme launched by the Government Unified Payment
Interface(UPI) is expected to give cashless economy a huge boost.

13
CHAPTER: 2 OBJECTIVES OF STUDY

14
 OBJECTIVES OF STUDY

RESEARCH OBJECTIVES

 To study about cashless economy

 To study the impact of cashless economy on society of Navi Mumbai.
 To study the challenges and prospects of cashless economy.
 To make awareness to people about various cashless schemes introduced by the
Government of India.
 To study about the digital modes of payment which India is going to adopt.

2.1 Advantages of cashless economy

As the country moves towards cashless environment after demonetization, the

government came up with various schemes but will it be able to influence people in the long run
only time will tell.

But, to clear public doubts about cashless economy what it holds in future, here are some of
the advantages of cashless economy.

 Saves time and money: Government and companies will get efficient and they can
reduce costs if they are no longer required of manual accounting work to be done. The
costs which are related to accounting and handling of cash is very high, so cashless
transactions can help to save both time and money.
 Taxation: Taxation will help in economy growth of the country as with less amount of
cash at home and more in bank will have no scope for hiding income and evading
taxation and where there is more tax payers, the country will get benefit as there will be
less rate of taxation.
 Reduce illegal activities: When people will be cashless, there will be less chance of
getting involved in theft, crimes there will be no option for indulging cash into illegal
activities, crubbing illegal activities is one of the major reasons to go cashless.
 Leads to transparency and accountability: With cashless, it will be lot easier to track
the flow of amount of money with every transaction which the users are doing to track
them, this will make the system more system and compliant. This will benefit in the long
run as it will have a positive impact on business and economy as a whole.
 Safety to people: Cashless can bring safety to people as there will be less chance of
robbery and people can feel safe when they are doing transactions, also people don’t need
to carry bundle of paper-notes as well along with them as only having a pack of cards
will be sufficient for them to carry out the transactions or required amount.
 Easier to track black money: This is one of the most important take for cashless
economy of the Government as to stop black money and corruption going cashless is very

15
 much needed, while going cashless it will be easier to track black money and illegal
transactions as all the records of the transaction will be transparent to the banks which
have been recorded for the transactions done by an individual which will lead to fall in
corruption level of the country.

2.2 Scope of study

Cashless transactions are one of the fastest growing things in the world today so in order to
match with today’s world the government of India announced demonetization as a result in
which people were banned the complete use of Rs. 500 and 1000 high currency notes, this also
resulted in digital transactions as government made the first move towards cashless economy.

This study will also know to find out what is the scope of cashless economy in today’s world
also related to India.

When demonetization was announced then the whole nation was taken aback as the use and
dependce of notes was high for people and the people were tensed as what to do now as notes
have banned from using, however amid all these tensions one sector was there who was gaining
huge profits this was mobile wallets sector companies like PayTm mostly came into limelight
after demonetization and many street vendors, hawkers and small income people started to use
PayTm as a transaction medium. It is expected that mobile wallets has a great scope and is
expected that by 2020, more than 80% people even in rural areas will also start using digital
transactions with the help of mobile wallets.

Scope of study on cashless economy are:

 The main and overall scope is to make all Indians aware of the benefits of cashless
transactions and also the ways of doing transactions digitally which will help India
become a cashless economy.
 To make change there will be need of lot of efforts from public and the government
which we see as a cashless economy in near future which will lot depend on digital India
programme as well.
 On being transformative which means that to realize tomorrow’s India which is cashless
transactions and lot of work to be done in IT sector and for that many jobs will be given
to the youths to make India cashless.
 We can get to know that the government will introduce many more schemes to argue
people to use cashless transactions as it will curb black money in future and will also
have great impact on Indian economy.
 The cashless India/economy puts together a large number of ideas, thoughts process
which will come together into a single, compressive ways so that the ultimate aim of
cashless economy can be achieved in long run.

16
 Many job opportunities will be created as Digital and cashless India project are
coordinating each other so in order to get the target there will be many jobs in IT sector
up for grabs in future.
 According to economic times, a English newspaper cashless/digital India will help the
nation to increase GDP by 20-30% by year 2026.

17
CHAPTER:3 LITERATURE REVIEW

18