Cash Won’t Be Obsolete in India Anytime Soon
People waiting in line in January to get cash from a bank branch in Dhadgaon, India.
Photographer: Dhiraj Singh/Bloomberg
India’s road to a cashless economy is going to be longer than many technological optimists had hoped. It turns out people will shift to digital payments very quickly when they’re forced to, but they’ll still want some paper money in their purses.
Back in November, Prime Minister Narendra Modi shocked the nation by announcing that existing 500-rupee ($7.75) and 1,000-rupee bank notes—about four-fifths of the rupees in circulation—would become invalid almost overnight and had to be exchanged for new bills. The idea was to curb tax evasion and corruption by exposing stockpiles of cash that had stayed outside the banking system and were essentially invisible. Indians have used cash for about 98 percent of consumer payments.