From black money, fake currency and terror financing to cashless society in India

Indian PM saying "I am not hiding my

 face. It's a Radio Program"

The primary pitch and narrative of the demonetisation drive by Indian Prime Minister Narendra Modi seems to have taken a major shift to cashless economy from the initial key highlights of war against

black money, corruption and counterfeit currency.

“Our dream is that there should be a cashless society. This is correct that 100 percent cashless society is never possible. But we can make a start with less-cash society, then cashless society will not be a far-off destination,” Modi said in the programme.

 A significant part of the speech was devoted to the youth with the Indian PM calling out to make the transition happen first to a ‘less-cash economy’ and a ‘cashless’ economy later. There was mention about black money, but the core of the talk was change to a cashless economy.The Indian PM urged people to start using cash substitutes like debit cards and digital wallets, saying it will make transactions cheaper and easier and in the long-term it will help India "leapfrog into a less cash-use economy at par with more developed nations."

"We are also urging banks to make a big push with PoS (Point of Sale) machines with traders so that debit card use becomes more prevalent," Modi said.

again, a presser by the RBI governor Urjit Patel addressing the public to detail the cash situation in the banking system would have been far more effective. 

To Mr Modi  I'd like to say "Dear Leader" firstly move a significant amount of labour to the organized sector, secondly take care of shaky internet and third get rid of powercuts please  and than after you do take a look @ these precedents of trying to create a cashless society in the developed world:

• Belgium’s Proton: Proton was an electronic purse application for debit cards in Belgium. The system was introduced in February 1995 with the goal to replace cash primarily for small transactions around € 15. For security, the card is limited to storing 125.00 EUR of available electronic cash (originally 5,000 BEF).The card is used for small payments without a pin code or signature, and runs the same risk as with ordinary cash in that if the card is lost the cash value allocated to the card is also lost.Proton has seen limited success in Belgium, despite being available on commonplace on parking meters, pay phones, and within convenience stores; possibly due to a poor understanding of the system. Security was based on the Message authentication code.The system has been retired since 31 December 2014. Customers are requested to offload the charged amount back onto their bank account before the expiration date.
• Netherland's Chipnik - Chipknip was an electronic cash system used in the Netherlands until 1 January 2015. All ATM cards issued by Dutch banks had smart cards that could be loaded with value via Chipknip loading stations next to ATMs. For people who did not have Dutch bank accounts, pre-paid Chipknip cards could be purchased at various locations in the Netherlands. Chipknip was used for payments at parking machines, office canteens, and for other small retail transactions. No network access was required by the payment collection terminal. The system was complementary to the online electronic point-of-sale payment system known in the Netherlands as "PIN" which transfers money between bank accounts in real-time. The maximum value of Chipknip storage and transactions was quite limited, but adequate for small retail transactions. Chipknip was introduced in 1996, based on technology used in the Belgian Proton electronic cash system. Value stored on the card does not need a PIN to unlock it: the card is entered into the reader at the point of payment, and the card holder simply confirms the transfer of value.Chipknip is owned by the Dutch organization Currence, which also owns PIN and iDEAL.Statistics issued at the beginning of 2007 indicated that Chipknip grew by 12% in 2006 over 2005 and was used for 165 million transactions. The average transaction value was €2.68. Transaction volume has grown from 9m transactions in 1998.Based on a 14% drop in Chipknip transactions from 2011 (171.7 million) to 2012 (148.2 million), managing organisation Currence announced on 27 March 2013 that Chipknip would no longer be accepted or used as from 1 January 2015.
• Hong Kong’s Octopus card system: Launched in 1997 as an electronic purse for public transportation, is the most successful and mature implementation of contactless smart cards used for mass transit payments. but it has been moving into other areas of the economy too After only 5 years, 25 percent of Octopus card transactions were unrelated to transit, and accepted by more than 160 merchants (That is right dear leader after 5 yrs not 5 days) for more info click here

On the other hand, despite three weeks after the note ban, the cash crunch continues across the country where people are still struggling to find lower denomination notes. ATMs and bank branches are still running dry. This is despite the assurances by the government and the RBI that there is enough cash in the system to cater to all customers and the government mints are working in full capacity & that's not all  Fitch Ratings on Tuesdasy lowered India's GDP growth forecast for this fiscal to 6.9 per cent from 7.4 per cent, saying there will be "temporary disruptions" to economic activity post demonetisation.

It said economic activity will be hit in the October-December quarter because of the cash crunch created by withdrawal and replacement of 500 and 1000 rupee notes that accounted for 86 per cent of the value of currency in circulation.