A Study on the Implication of Cashless Economy: Challenges and Opportunities in Indian Scenario with Special Reference to Velur, District,

Jency Baby Assistant Professor Department of Commerce Mercy College, Palakkad, Kerala Ph: 8547511035 [email protected] Abstract

Money is the most important part of one’s life. It is necessary for the smooth flow of our economic system, for a secured life and also for meeting the day to day necessities in one’s life. One cannot think off a situation without handling money in a way or the other in each and every day. So the need of money and its circulation plays a vital role in balancing the economy in all sectors. Due to immense need of cash their occurred problems like theft, burglary etc. and the people found it unsecured to handle liquid cash for varying transactions. At this moment, the introduction of cashless system came into the action which really strike into the minds of the society as it was really convenient to hold and to travel from place to place without any suffocation of handling huge liquid cash in hands. So the present study is related to the shift of cash to cashless economy in the Indian scenario with special reference to Velur, a small village situated in , Kerala and it is found that the use of e- cash is a good phenomenon for easy access as it is a means of comfort for those who use the same if internal threats like hacking, cyber-attacks doesn’t exist, and the same can be implemented effectively to the present generation.

Introduction

Money plays a vital role in the smooth functioning of our society or else the economy will become a standstill. It is indeed a beautiful medium to transfer from one place to another for acquiring various goods and services. When money is used to intermediate the exchange of goods and services, it is performing a function as a medium of exchange. It thereby avoids the inefficiencies of a barter system, such as the "coincidence of wants" problem. Money's most important usage is as a method for comparing the values of dissimilar objects. It acts as a standard measure and common denomination of trade. It is thus a basis for quoting and bargaining of prices. It is necessary for developing efficient accounting systems. But, at present digitalization has attained necessary significance in the minds of the public in order to carry out varying transactions through online i.e., within the country and abroad. Various e- payment methods like e-banking, usage of various digital cards for money transactions, online shopping, bill payments etc. are now performed effectively through the advent of digitalization or otherwise known as cashless system. So there is no need for the individual to travel to the bank and other places and stand in long queues to settle their transactions. Today a good quantum of educated people in our society makes use of these facilities too. Thus it has become a dynamic medium of exchange in our economic system.

History of the evolution of Money

In the initial stages there were only barter system prevailing in our economy. In barter age there was no money. The trade used to take place without any money. Goods were exchange for goods and there was a problem of double coincidence of wants. As the society developed, people found that they need some commodities more than others and their wants are of varying importance. This increased the importance of some commodities and goods. Gradually these commodities attained the status of money in that era. People used to value these higher than others. So these different goods or commodities became money in that era.

Money serves as a common medium of Exchange. It eradicates the inconvenience of “double coincidence of wants.” Now anyone can buy anything and sell anything for money. It has greatly helped in the establishment, working and development of all banking and monetary institutions. It has made it possible and extremely easy to invest and save. Money has greatly helped the accounting of public finance, tax revenues and government revenues etc. Money is any clearly identifiable object of value that is generally accepted as payment for goods and services and repayment of debts within a market or which is a legal tender within a country.

Brief History of Velur

Velur is a small village and Panchayat in Thalapilly Taluk, situated in Thrissur district, Kerala. Other places close to Velur are Kechery, etc. It belongs to Central Kerala Division and is located 16 km towards North from district headquarters Thrissur, 7 km from Wadakkancherry and 297 km from State capital Thiruvananthapuram. This place is in the border of the Thrissur District and Palakkad District. is the local language here. The total area comprises of 28.32 km2 (10.93 sq. mi). The population of the village according to the sensex 2001 is 22,155 and the density of the same is 780/ km2 (2000/sq mi). Official Languages used are Malayalam and English. The sex ratio 0.89 ♂/♀ and has a literacy rate of 90.15%.

Statement of the Problem

Cash forms a major part in the effective functioning of our economic system. It is a medium of exchange in the hands of each and every one. Due to the immense need for cash their occurred theft, burglary, under world activities so that people can circulate money in a good quantum for their necessary activities. And as such the transfer of money from one place to another became a decisive role. At this stage the introduction of e-cash gained importance. People started making use of these electronic payment systems for transferring and also to purchase and sell various commodities without handling liquid cash in hand. The present study focuses on the challenges and prospects that have taken place at Velur, a small village in Thrissur District, and its citizens on the adoption of latest technologies like e payment systems, to perform their day to day activities.

Scope of the study

The present study is about the status of people at Velur in terms of technological progress while carrying out their daily routines along with their respective jobs. The study also measures the activities of the people in this locality and tries to identify their problems and constraints in adopting these technological tools for various activities. The scope of the study is limited to this village due to constraints of time. There are similar other villages in the nearby locality were people performs various activities and jobs and who uses these technologies which are not taken into consideration by the researcher.

Methodology

 The study is mainly based on primary data.  Questionnaire method was used to collect data from the residents of Velur.  Secondary data are also collected from articles and websites.  Direct personal interviews were made with the residents of Velur.  Simple percentage analysis was conducted to analyze the variables.

Objectives of the study  To analyze the capabilities and awareness of individuals at Velur with regard to E- Systems.  To analyze on the attitude of rural folk at Velur towards internet usage and cashless system.  To analyze the importance and comforts on the adoption of e-facilities in varying activities at Velur.  To know the problems and challenges faced by the people at Velur while using these latest technologies.  To analyze the accessibility of people at Velur through cashless system.  To analyze the role of Government and local authorities for the upbringing of the people at Velur in the technological aspect. Rural Folk at Velur

Most of the people residing at Velur are typically engaged in agricultural and other allied activities without having much exposure to the outside world. But at present there is some improvement in the same i.e., in the present generation as they are exposed for higher studies and jobs outside their premises. But even then the composition of total population i.e., in the class of senior citizens, majority are illiterate and works within their locality without even looking or noticing the light of latest technologies that have been adopted in our economy and are not at all bothered of these changes and stands firmly themselves in their old norms, values and beliefs i.e., in their oldest methods of exchange and so on. But even then a good quantum of people i.e., the present generations have changed a lot in their attitude towards their latest trends in technology and other related aspects and are using the same in a better way.

An Analysis on the Attitude of Rural Folk at Velur towards Internet Usage and Cashless System

Velur has around 4300 houses approximately comprising of 17 wards. The present study comprises of 170 households i.e., the researcher has selected 10 houses from each wards comprising of 170 households for the study, on their approach towards cashless economy. These houses are selected on the basis of ration card status i.e. APL and BPL. (5 APL and 5 BPL families)

Ward The reason for using internet Number For For Doing For Doing For For online Online Knowledge Online Entertainm transaction Courses gathering Jobs ent s

1 APL 3 0 0 4 2 BPL 0 0 0 2 0 2 APL 2 1 0 1 1 BPL 0 0 0 0 0 3 APL 1 0 0 3 1 BPL 0 0 0 0 0 4 APL 1 0 0 5 3 BPL 1 0 0 2 0 5 APL 0 2 0 5 1 BPL 0 0 0 0 0 6 APL 2 0 0 4 2 BPL 0 0 0 0 0 7 APL 2 0 2 2 0 BPL 0 0 0 0 0 8 APL 4 0 0 1 0 BPL 0 0 0 0 0 9 APL 0 0 0 0 1 BPL 0 0 0 0 0 10 APL 0 0 0 2 0 BPL 0 0 0 0 0 11 APL 1 1 0 3 2 BPL 0 0 0 0 0 12 APL 0 0 0 2 1 BPL 0 0 0 2 0 13 APL 0 0 0 4 0 BPL 0 0 0 1 0 14 APL 0 0 1 5 1 BPL 0 0 0 2 0 15 APL 2 0 0 4 0 BPL 0 0 0 1 0 16 APL 0 1 0 3 0 BPL 0 0 0 1 0 17 APL 1 0 1 4 0 BPL 0 0 0 0 0 Grand 20/170 5/170 4/170 63/170 15/170 Total APL BPL APL BPL APL BPL APL BPL APL BPL 19/85 1/85 5/85 0/85 4/85 0/85 52/85 11/85 15/85 0/85 Grand 11.76 2.94 2.35 37.06 8.82 Total in % APL BPL APL BPL APL BPL APL BPL APL BPL 22.35 1.17 5.88 0 4.71 0 61.17 12.94 17.64 0

Ward Reason for not using internet Number Not Doesn’t Only basic Due to fear in Due to Interested have knowledge losing money additional knowledge in English in online charges/ to use transaction unwanted expenses 1 APL 2 0 0 2 1 BPL 3 4 5 1 5 2 APL 3 1 0 1 1 BPL 5 5 4 0 4 3 APL 1 2 0 4 0 BPL 2 3 3 2 4 4 APL 2 2 0 3 1 BPL 4 4 5 0 5 5 APL 1 1 0 4 0 BPL 3 5 4 1 4 6 APL 0 1 0 4 2 BPL 1 5 4 0 5 7 APL 2 2 1 3 0 BPL 1 4 5 0 3 8 APL 2 1 1 4 0 BPL 1 4 5 0 4 9 APL 3 2 1 2 1 BPL 2 3 4 0 5 10 APL 2 1 2 3 0 BPL 1 5 5 0 5 11 APL 1 0 0 4 0 BPL 4 4 5 0 4 12 APL 1 1 0 3 0 BPL 5 4 3 1 5 13 APL 2 3 0 2 1 BPL 4 5 4 0 4 14 APL 0 1 0 4 0 BPL 3 3 5 1 5 15 APL 1 0 0 4 0 BPL 4 3 4 0 4 16 APL 1 1 1 3 1 BPL 3 3 4 1 4 17 APL 0 2 0 3 0 BPL 2 4 5 0 5 Grand 72/170 89/170 80/170 60/170 83/170 Total APL BPL APL BPL APL BPL APL BPL APL BPL 24/85 48/85 21/85 68/85 6/85 74/85 53/85 7/85 8/85 75/85 Grand 42.35 52.35 47.05 35.29 48.82 Total in APL BPL APL BPL APL BPL APL BPL APL BPL % 28.23 56.47 24.71 80.0 7.06 87.06 62.35 8.24 9.41 88.24

 Out of 17 wards only 20 families make use of internet for grasping knowledge, that too 22.35% constituting APL and 1.17% from BPL.  Only 2.94% of the people make use of e-facility to carry out online studies.  4 families make use of the same for online jobs and that too from APL section only.  Around 63 families makes use for entertainment and that too 61.17% by the APL itself.  Only 8.82% people make use of the internet for cashless transactions and that again by the APL’s only.  Around 42.35% of the people are not interested to make use of online transactions which even includes senior citizens from APL section too.  89 families don’t even know as how to operate a computer and out of it majority i.e., 80% of them falls from BPL category.  Around 47.05% of the people have only basic knowledge in using English that too more in the BPL section.  A good quantum of people i.e. 35.29% hesitates to carry out online transactions due to the fear of losing money.  Around 48.82% hesitate to use as they have to incur extra charges for making payments and other transactions through online cashless system.

Findings

 E-payment or cashless system is adopted in Velur only by the literate and young generation. The same is not applicable for the localities like farmers, coconut climbers, and daily wage workers as they are unaware to use the same and also doesn’t have access to it.  In certain situations farmers etc. need more amount for purchase of seeds and fertilizers and for the payment of daily wage to workers. In such case they can’t get immediate cash from the bank as the maximum withdrawal limit on a daily basis is Rs.40, 000/- only.  Velur has only internet access for BSNL and Airtel connections. Other companies doesn’t have a network out there due to low signal and as such those people who has other connections will be forced to take new connection in BSNL or Airtel for internet access which makes an additional burden to them and due to all these technical difficulties majority of the people hesitate to make use of such facilities.  Out 170 houses, only 15 to 25% of the people approximately uses online facilities.  Majority of those who access internet are mainly for downloading songs, movies and games and not for any e-transactions because they too hesitate to use due to fraudulent activities that is taking online.  Very few people uses online for cashless payment that too very rarely and thus the use of e-payment has not gained importance at Velur at all.  For making use of e- payment system the organizations and shops are asking extra 5 to 10 % additional charges which again makes the situation bad as to use it or not.  Majority of the residents at Velur wishes to have shopping with their family members as it is a time for them to enjoy altogether rather than purchasing these products online and living an idle life.  Only 3 to 4 banks are functioning for the entire 12 to 15 km length space i.e., from Kechery to Kurrancherry (Velur lies in the middle of this) which makes the situation more horrible as there is a huge rush into the banks for varying transactions from the residents of these areas.  The present senior citizens hesitate to adopt these latest technologies that too in their old age. So such changes can be adapted only to younger generation and due to this the number of people approaching banks is on a huge rate even now.  At Velur, internet access is found only with a very few people as it is not affordable to the poor and as such finds the same as an additional unwanted cost.

Suggestions

 Cashless system is indeed a good approach to reduce wastage of carbon footprint by reduction in cutting the number of trees, but the introduction of the same on the spot has brought a lot of difficulties to the intimates of Velur. So such measures should be adopted by the authority only after studying the nook and corner of it as it may not affect anyone in any way.  The authority might have provided with adequate training classes for the residents of Velur and the nation as such before introducing e-system as how to make use of such facilities.  The authority must implement the same only after closing all the loopholes and then introduce it as many people hesitate to use these technologies due to internet hacking and loss of money.  The concerned Municipality or Panchayat should provide awareness classes to the residents of Velur in using e-facilities before adopting such drastic changes as at present people are in the situation of panic and chaos as what to do next to pay for the localities like daily wage labourers, coconut climbers etc.

 The adoption of cashless economy can be implemented only to present generation and also to the upcoming generation and not to the senior citizens of Velur who won’t adopt the same in any manner as they don’t have the patience to study such things. These senior citizens would like to adopt the same old procedures of purchasing and selling goods and services and going directly to bank for varying activities. They would never use the latest mobile or online technologies in their life now.  Internet jams i.e., frequent online network errors in the system while carrying out a transaction makes the people irritated to make use of these e-techniques because in certain cases at the time of making payment the network error occurs and the customer doesn’t know whether the amount has been debited or not and the system again asks to retry the activity thereby losing the amount twice or more than that.

 It is not easy to change the attitude of rural people from their old tradition on to a sudden change to the latest technology.  The authority can provide awareness to the senior citizens on the importance of adoption of latest technologies for the smooth flow of our economic system.

Conclusion

From the study, it is found that only few or no people are making use of e-facilities for their day to day transactions. Thus the functioning of cashless system is not at all effective in this Velur village. Kerala is state with 100% literacy rate. If this is the situation in a small place at Kerala, then the conditions of illiterate states like Bihar, Orissa, West Bengal would be much more pathetic.

Out of 120 crores of people residing in , only 40 crores i.e., 33% of people only have access to internet. So the implementation of cashless system hasn’t worked effectively up to the mark because of the lack of computer knowledge and internet facilities and such measures must be implemented only after looking into the pros and cons on the localities. E-facilities are applied in other parts of the world too. Around 99% of the people in countries like America and Japan make use of e- facilities as it is fully developed in all aspects. But that is not the case with India. The adoption of these techniques can be implemented successfully only to the upcoming generation and also to the present middle aged people and not to the senior citizens at all. Also it will take necessary time and cost to upbring the lower sections of the society into the field of literacy and e-literacy which indeed really is a heavy task to fulfill and might take some quantum of years.

One of the main advantages of using e-facilities is that it helps to avoid a lot of physical transactions, reduction in the usage of liquid cash thereby reduction in robbery, cutting of trees for making paper currency, thereby protecting our ecological system as such. So it is the duty of the authorities to enhance these e-facilities by providing adequate guidance to its people from time to time and take necessary steps to educate them in all spheres, join hands for the enhancement of cashless system for the betterment of our society which in turn nurture for the overall development of our nation as a whole.

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