Digital Economy Cashless Economy

Digital Economy Cashless Economy

Digital Economy

The world as we know is rapidly changing and Digital Economy has played an elementary role in such transformation. At its core, digital transformation isn�t just about social networking. It�s about using the latest technology to do what you already do � but better.i.e to say digital economy is SMART economy.

?      Social

?      Mobile

?      Apps

?      Real-time

?      Trusted

Technology advances quickly, yet organizations and skills tend to move at a slower pace. In the coming decades, the gap between swiftly evolving technology and the slower pace of human development will grow wider as exponential improvements in artificial intelligence, robotics, networks, analytics, and digitization affect more and more of the economy and society. 

Inventing effective organizations and institutions suited for the digital economy is the grand challenge of our time.

The global economy is undergoing a digital transformation, and it�s happening at breakneck speed.

What is the digital economy?

Digital economy is an umbrella term used to define the worldwide network of economic activities enabled by the information and communication technology.in simple terms it is an economy based on digital technologies,where cash is seldomly used hence can also be termed as Cashless economy.

The digital economy is taking shape and undermining conventional notions about how businesses are structured; how firms interact; and how consumers obtain services, information, and goods.

The aggressive use of data is transforming business models, facilitating new products and services, creating new processes, generating greater utility, and ushering in a new culture of management.

However, the digital economy is not simply about moving business transactions from face to face to online, but also transforming the various facets of business interactions and transactions and also enabling economic innovations. For example, the digital economy both is enabled by and has given rise to the advent of new digital currencies and payment processes (i.e. the Digital Wallets).

The significant risks associated with digital economy are Unauthorized access and use of corporate and personal information .

There are various questions being raised about this new economic model that have yet to be answered. Some have wondered whether cash will become extinct. Others have asked whether a single globally accepted currency will emerge.according to the Economists neither scenario is likely -- at least in the near future.

According to the Goldman Sachs prediction that India - could be the second largest economy by 2030. India�s new leadership considers the digital economy as a major growth enabler. When Prime Minister Narendra Modi strategically listed �Digital India� among the top priorities for the new central government, he delivered a resounding nod to the digital economy�s opportunities.

�I dream of Digital India where mobile and e banking ensures Financial Inclusion�- Narendra Modi

Prime Minister Modi�s vision for a Digital India is a strategic call to embrace the opportunity for India as one of the leaders in the third industrial revolution, and the use of Information and Communication Technologies (ICTs) that has never been greater.

India�s leaders also acknowledge the digital economy�s potential and have substantially invested in digitalization for public and private sectors. The commitment of India�s government to spend Rs1.13T (US$19 billion) within the next five years strategically acknowledges the increasing value of Communication Technologies (ICTs).

Nearly 40 percent of the global value at stake will have new winners and vendors in the next decade. This major opportunity of the digital economy has the power to change the lives of millions of people of India. It could be an important vehicle for change and it could provide the opportunity for India to dramatically expand its role and influence in the global economy and become a powerhouse of digital innovation.

Cisco estimates that all IoE pillars - Internet of things, Internet of people, Internet of data, and Internet of Process for India have a value at stake (VAS) of INR 31.880 trillion (about half a trillion U.S. dollars) for the next ten years. From that INR 7.263 trillion is in the public sector and INR 24.616 trillion is in the private sector during the next decade.

With a clear vision, the present government is pushing ahead the Digital India initiative to transform the country into a digitally empowered society and a knowledge economy. With the launch of Digital India initiative, the government aims to reach out to citizens in the remotest of locations and make them a part of India�s growth story. Since technology is a key driver in causing disruptive change, digital tools will empower citizens and prove to be a game-changer.

Nobel Prize-winning economist Joseph Stiglitz stated, at the World Economic Forum meeting in Davos, Switzerland, that the United States should follow Modi�s lead in phasing out currency and moving toward a digital economy because it would have �benefits that outweigh the cost.�

 

SUCCESSES OF DIGITAL INDIA

  

?      E-Pathshala: Transforming Learning through Technology

The Ministry of Human Resource Development introduced the e-Pathshala programme to promote �learning on the go� among students, teachers and parents. Through this initiative, free access to NCERT books is available to students of classes 1 to 12. These books are available in both Hindi and English.

?      eBiz platform

The initiative, driven by the Department of Industrial Policy and Promotion (DIPP), seeks to provide comprehensive Government-to-Business (G2B) services to business entities with transparency, speed, and certainty. The aim is to reduce several levels of points of contact between business entities and government agencies, establish single-window services and reduce the burden of compliances.

?      My Gov platform

This is a platform for citizens to exchange ideas and suggestions with the government. Through this initiative, the government receives feedback, inputs and ideas from people regarding policy decisions and new initiatives like Digital India, Swachh Bharat, Make in India, among others.

?      Jeevan Praman

The Jeevan Praman programme enables pensioners to conveniently submit their life certificates online through this portal. The certificates are stored in the Life Certificate Repository and available to pensioners and Pension Disbursing agencies.

?      Digital Locker System

DigiLocker is a key initiative under Digital India. This programme is targeted at paperless governance and is a platform for issuance and verification of documents and certificates digitally. A dedicated cloud storage space is given to all those who register for the Digital Locker account. To make it an easy process, this storage is linked to their Aadhar (UIDAI) number. Unified Payment Interface (UPI)

With a system such as UPI, the billing processor is eliminated, and transaction costs are close to zero. The mobile phone and a personal identification number take the place of the credit card as the authentication factor. All you do is download a free app and enter your identification number and bank PIN, and you can instantly transfer money to anyone, regardless of which bank he or she uses. Transfers would happen within seconds, even faster than the 10 minutes that a bitcoin transaction takes.

Digital India has been introduced to with the motive of smooth implementation of e � governance in the country and transform the entire ecosystem of public services through the use of information technology. as there is no better way to promote inclusive growth other than through the empowerment of citizens.

Digital economy as a theme of Budget 2017

Digital economy is one of the nine themes of the budget. According to the Finance Minister, Digital Economy provides speed, accountability and transparency in the country.

�Promotion of a digital economy is an integral part of Government�s strategy to clean the system and weed out corruption and black money.  It has a transformative impact in terms of greater formalisation of the economy and mainstreaming of financial savings into the banking system.  This, in turn, is expected to energise private investment in the country through lower cost of credit.  India is now on the cusp of a massive digital revolution.�

The budget makes several efforts to realize a number of goals related to the digital economy. These include the construction of digital payments infrastructure, enhancement of digital connectivity in rural areas, provision of skill and education to the youth, raising the quality of e-governance, promotion of digital manufacturing and the important goal of �cleaning� the economy and society.

1. Digital payments

Budget has now turned as a promotion platform for digital payments. A Mission will be set up with a target of 2,500 crore digital transactions for 2017-18 through UPI, USSD, Aadhar Pay, IMPS and debit cards. Already, the JAM (Jan Dhan, Aadhaar and Mobile) is linking people and public services. The direct benefit transfers through which transfers are delivered to the weaker sections are using the digital platform. It has proved that shift to digital payments has huge benefits for the common man. Financial inclusion and the JAM are now creating big improvement in the delivery of government services among the people.

Finance Minister declared that the government will launch two new schemes to promote the BHIM app. The first one named Referral Bonus Scheme will be for individuals and the second one named Cashback Scheme will be for merchants. Similarly, another payment facility called Aadhar Pay which is a merchant version of Aadhar Enabled Payment System, will be launched shortly.  Banks have targeted to introduce additional 10 lakh new PoS (Point of Sale) terminals by March 2017.  They will be encouraged to introduce 20 lakh Aadhar based PoS by September 2017.  

Budget also stressed steps to promote digital payment applications including the BHIM App use in important institutions and market places. Digital payment modes including the BHIM App will be promoted in petrol pumps, fertilizer depots, municipalities, Block offices, road transport offices, universities, colleges, hospitals etc. 

The Finance Minister observed that increased digital transactions will enable small and micro enterprises to access formal credit. 

The Budget also promises to upgrade digital payment regulatory framework so that it will encourage the industry and banking sector to adopt new payment technologies.

Already a Committee on Digital Payments (Ratan P Watal) constituted by Department of Economic Affairs has recommended structural reforms in the payment eco system. As a follow up, the existing regulatory framework for digital payments- the Payment and Settlement Systems Act, 2007 will be amended this year.

The budget also proposes to create a Payments Regulatory Board in the Reserve Bank of India by replacing the existing Board for Regulation and Supervision of Payment and Settlement Systems. 

2. Connectivity

The second component of the government�s digital economy initiative in the budget is enhancement of connectivity. Without speedy connectivity, people can access digital services and hence broadband connectivity is to be expanded. For this, the an allocation of Rs 10000 crore

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