The twenty first century is often termed as the “Asian century”. Consistently growing economies like India and China are at the center of the transformation. The target of becoming a $5 trillion economy is possible for India only if it takes the right steps to grow in the right areas, at the right pace and with the right strategy.
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Economic dominance is determining global dominance. If India wants to be among global leaders by increasing its GDP to $5 trillion, it needs to make Indian capital markets international, it needs to achieve not only financial inclusion but financial expertise at the ground level and finally, it needs to work on domestic financial breadth and depth.
If India wants to be a 5 trillion economy by 2024, it needs to grow sustainably and fast in all 3 sectors- agriculture, industry and services. In agriculture, organic farming, multi-cropping and mixed farming, Supply Chain Management, organized farming through FPOs and advanced agriculture through value addition are some important steps. In Industry, we need to promote small industries & handicrafts by making them advanced and economically viable. we also need to encourage global companies to invest in India, not merely sell in India. In services, we need to promote sectors like tourism & advanced IT. Data is the new oil, so we need to convert India into a data warehouse of the world.
If India wants to become a $ 5 trillion economy, it needs to use its most abundant resource wisely- Human capital. This can be done through an updated approach on elementary, higher & vocational education.
Every global leader has become so by being innovative in its approach to rise to the top. If India wants to be one among global leaders by creating a $ 5 trillion economy, it needs to figure out new and innovative ways of growing. For example, Solar energy is an upcoming industry presently led by China. India needs to convert environment challenges into an opportunity by converting every sustainable model into a global industry. Similarly, spiritualism (happiness) is also emerging as a new industry due to busy lives of people in Urban areas. If India wants to be different, it needs to convert these niche occupations into a global industry. By doing so, it can also break the barrier of conventional methods of measuring growth.
Steps are also required in areas like Governance and Ease of doing business to convert India into a global destination for doing business.
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The Global Pandemic has affected all countries around the world. India is also not safe from its deadly impact. India might not be able to achieve the target of $ 5 trillion economy, but the nation needs to be focused on expanding the economy in the right way so that once the impact of pandemic subsides, our strengths can help us grow exponentially in the future.
Cashless economy- Pros and Cons
Only 4.18% of all Indian citizens filed tax returns in 2018-19. On the contrary, 56% of US citizens filed tax returns in recent years. The massive difference in tax returns is due to high tax evasion is India, the primary reason being presence of a cash economy. A country cannot prosper if people do not contribute by honestly filing taxes. Creation of a Cashless economy solves the problem of tax evasion by creating a digital footprint of every transaction, thus contributing towards development of our country.
The major advantage of a cashless economy is creation of a digital footprint. It directly targets illegal, fraud and terrorist activities. Many such acts are either averted or caught in time due to conversion of global financial system into a digital system.
Cashless economy has boosted the formal financial system and contributed towards financial inclusion in India. Moneylending and ponzi schemes have been responsible for exploitation of poor and illiterate people for 70 years. Financial inclusion contributes towards welfare & development of the most needy by bringing them under the formal net of financial system.
Emergence of cashless economy has created a new digital industry globally. This industry does not pollute the environment, does not harm sustainability of the earth and provides immense employment opportunities for the youth of India. Cashless economy has given a boost to the banking system by increasing deposit and credit growth as a percentage of GDP. A banking system with more depth means a healthier financial system of the country
The cost per transaction is much less in case of a cashless economic system. It is cost
Every technological solution is like a twin edged sword. Cashless system is no exception. The following disadvantages pose serious threats to the sustainability and strength of a cashless economy.
Online frauds have become prominent around the world. Professional hackers steal online details of individuals to carry out large transactions out of accounts of the victims. Due to limited financial literacy, many people fall into the trap of online frauds and lose their life’s savings. The intensity of Online frauds is much larger than cash frauds.
Many people are left out of the system due to illiteracy or unawareness. The lockdown enforced due to threat of covid-19 had the biggest impact on migrant workers and poor people, dependent on cash for their livelihood. Since they do not have the knowledge or awareness about how to have online presence, they are left out of the system.
Cashless system has given way to a new online industry of peer-to-peer lending. Although it is good for increasing credit growth, P2P lending undermines the formal financial and credit system by creating a parallel economy. Cashless system has given rise to digital currencies like bitcoins. They are unregulated and uncontrolled, often used for illegal transactions. It is also more difficult to track these unauthorized transactions.
Despite all the disadvantages/ threats attached with a digital and cashless economy, the future lies in accepting the change and using it to stimulate financial inclusion in the country. It can be a game changer in transforming our country from a developing, poor nation to a developed nation and a superpower.