At the outset let me start with a disclaimer. I am no one to comment on “Demonetization”, neither I have a view. I would like to wait the see the impact and effect. However as a technocrat , having experience of nation wide Aadhaar implementation I can certainly identify the impact of going cashlesss.
1. With Cashless you get into a formal economy . Nearly 75 percent of India is Bharat or Rural. Out of 24 crs Jan dhan accounts more than 60 percent people with jandhan are from Urban and Semi urban cities. This means Out of 70 crs adult population in villages only around 7- 10 crs have bank accounts i.e. They are part of a formal economy. With aadhaar and Jandhan acccount under Financial Inclusion you get the remaining 50 crs into the formal economy. i.e They develop a formal credit history.
2. Freedom from the shackles of money lenders : Since more than 80 percent of the people are not in the banking systems they are devoured of public loans and micro finance. They are mostly dependent on the local money lenders with very high interest rates and get into a debt trap. Most of the farmers suicide are attributable to this debt trap. With Jandhan accounts you eliminate this problem . With formal credit history you now get bank and microfinance, loans and credit at a much lower rates and you get subsidies too. This is a Great Boon
3. With aadhaar based micro atm , connectivity and Business Correspondents (about 20 lakhs and increasing rapidly), Public banking system is all poised to reach every corners of the country. I learn from my economist friends that this system of formal economy will boost our GDP growth. Also this will wipe out cash cut money which adds to the black economy.
Thus you get a new free Bharat . Freedom from money lenders.
