Bharat SainiLast Updated on February 20, 2017 by Bharat Saini
Government’s Digital India Push Gains Momentum with Aadhaar-Enabled Transactions
In a bold move towards transforming India into a cashless economy, the government has accelerated its Digital India initiative, leveraging the demonetization of high denomination notes and promoting digital transactions. Prime Minister Narendra Modi, in his “Maan Ki Baat” radio broadcast, urged citizens to embrace digital payment methods. As part of this initiative, the government has launched awareness and education programs in rural areas, emphasizing the benefits of the digital economy.
One key aspect of this push towards a cashless society is the facilitation of Aadhaar number-enabled financial transactions through mobile phones. Aadhaar-enabled transactions are characterized by being card-less and pin-less. To utilize this system, individuals need to link their bank accounts with their Aadhaar cards. Subsequently, cash withdrawals and fund transfers can be carried out using the 12-digit Aadhaar number, authenticated through biometric fingerprint or iris scans.
This move is particularly significant for the 40-50 crore people in India who do not have smartphones or other electronic means for transactions. Aadhaar-enabled payments eliminate the need for individuals to remember PINs or passwords, making it a more accessible option for the poor and the illiterate. The government is actively working on developing a common mobile app that shopkeepers and merchants can use to receive Aadhaar-enabled payments, bypassing the need for credit and debit cards, PINs, or passwords.
To establish a truly cashless banking system, financial institutions in the country need to be Aadhaar-enabled. The Unique Identification Authority of India (UIDAI) has plans to increase biometric authentication capacity from 10 crore to an impressive 40 crore per day. This expansion aims to encourage widespread use of the platform and realize the vision of a cashless society.
NITI Aayog, the policy think-tank established by the government to replace the Planning Commission, has spearheaded this initiative. Mobile manufacturers have been consulted on the possibility of incorporating inbuilt iris or thumb identification systems in all mobiles made in India to facilitate Aadhaar-enabled transactions. The government is also exploring incentive and disincentive mechanisms to make cash transactions more expensive, encouraging people to opt for digital payment methods.
To ensure the success of this transition, the government is set to launch a comprehensive outreach communication campaign. The objective is to empower every segment of the population to use various digital payment modes, with a specific focus on promoting tools such as Unified Payment Interface (UPI) and digital wallet apps. The government envisions establishing a robust system for sustained digital transactions, marking a paradigm shift in the country’s economic landscape.
While the move towards a cashless economy holds great promise, the government acknowledges the need for widespread awareness and education to facilitate a smooth transition. By encouraging the adoption of digital payment methods and leveraging Aadhaar-enabled transactions, India aims to usher in an era of financial inclusivity and convenience for its diverse population. As the government continues its efforts, the success of Digital India hinges on the collaborative participation of citizens, businesses, and financial institutions alike.
