Kotak Securities, in a recent report, hinted that India is likely to take at least five to 10 years to transition into a less-cash driven economy.
Back in November, Prime Minister Narendra Modi introduced demonetisation to reduce black money in the system and also to push the country more towards a more digital economy.
Having closely analysed the progress India made over the last three months, Kotak Securities the country will take anywhere between 5 to 10 years to complete the transition successfully.
“India is possibly beginning the transition to a less-cash economy though far from achieving it”, said an excerpt from the report.
Besides claiming this, the Kotak report also touched upon the key factors which will help India achieve PM Modi’s digital dream.
“Expansion of infrastructure, higher penetration of technology, and, most importantly, change in social behaviour will be essential ingredients for a steady transition towards a less-cash economy. India lags behind comparable countries in most essential metrics,” the report stated.
While the challenges are far too many, the report said persevering with the agenda will help the country reach its ultimate goal.
“However, with unwavering commitment to this transition, India can achieve a significantly less-cash economy over the next 5-10 years,” added the report.
Further, the report stated that achieving the goal requires the country to improve and extend its digital banking infrastructure to the rural areas and spread awareness.
According to Bank of International Settlements (BIS) data, India lags behind a vast majority of developed economies. While India’s per capita non-cash transaction stands at $1,000, the number pales in comparison to the US, which stands at $273,000 per capita and $24,700 in Australia.
The report was optimistic in suggesting that India will take far less time in making the transition when compared to other digital economies as the use of technology has significantly improved.