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The government's notebandi drive has changed the way how India spends money to a great extent. The cash crunch, dried ATMs and hassles with the Rs 2,000 note have led many people towards digital transactions.
And as days go by, many seem to expect that India will now move inexorably in the direction of becoming a cashless economy.
In fact, if one looks between February 2017 and March 2017, the total number of digital transactions has jumped by around 16% to 69.9 crore. What is driving this increase?
There are primarily two reasons for it.
First, if we look at the rate of increase in the currency it has come down dramatically during the month of march 2017.
Second, there is a seasonality factor. March is the last month of the financial years and the payment of taxes (advance income tax and service tax) is not in cash. Thus, it boosts the non-cash transactions.
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My Colleague Vivek Kaul recently wrote an interesting piece explaining the same. Here's Vivek:
Now, in April 2016, the total number of digital transactions fell by around 4.4%. Given this, once April 2017, data comes out, we will get a much clearer trend on the impact of demonetisation and shortage of cash on digital payments.
Keep watching this space.
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