Cashless Economy; New Taxation System; Advantages

2. Certificate
This is to certify that Vivek Jain , student of Shri Vaishnav Academy,
Indore have completed there project on “Digital cashless economy” of Senior
Bal Vigyan in the year 2015-16.This project is their original bonafide
work carried out by them under our guidance. They worked sincerely
and have given a satisfactory work in the project.
Mr. H.C.Tiwari
(Principal)
Date:- 10-07-16
Place:- INDORE

3. acknowledgements
I Vivek Jain, student of Shri Vaishnav Academy, Indore thank Bal
Vigyan And Ryan International School for giving us this opportunity to
present ourselves on this platform.
Presented by:-
Vivek Jain

4. Contents
 Introduction
• Problems with Current Indian Economy
• A Digital Economy
 A Cashless Economy: How Does it Work?
• Mode of Depositing
• Way of Payment
 A New Taxation System
 Working of The New System
 Advantages

5. Contents
 Limits And Disadvantages
 Solutions Always Exist
 Practical Examples
• Kenya
• Sweden
• Somaliland
• South Korea
• Some Other Examples
 Conclusion
 Bibliography

6. introduction
Problems with Current Indian Economy:
• The modern Indian Economy is quiet fragile and
unstable.
• A lot of Black Money exist in our Economy. The
amount is greater than what are pending loans
on India.
• So much taxes exist that it is tough to even name
them all.
• The country of 100 crores is run by the taxes of
just 3 crores. This means that the taxation is
improper.

7. introduction
A Digital Economy:-
• A Digital Economy is one where purchases and
transactions are done mainly by electronic
means and cash is seldom used.
• As Cash is seldom used, it can also be called as
a “Cashless Economy”.
• This idea is new coming and only exists in a
few countries.

8. A cashless economy:
How does it work?
A Cashless Economy!
How does it work???Mode of Depositing:
Users are issued with a card called
Electronic purse . The electronic purse
is topped up Using revaluation
terminals. A range of terminals are
Now Available including coin & note,
Credit Card or payroll deduction
terminal.

9. Simply by inserting the card into a revaluation
terminal and following the instructions given,
money is added onto the electronic purse on
the card.

10. Way of Paying Money:
The card then replaces your wallet or purse
when paying for goods at both vending and
catering facilities.
.

11. Card readers are installed
at all Points of Sale (e.g.
vending machines,
Restaurant tills, coffee bar till, staff shops). Instead
of juggling with cash at the Point of Sale, the card
is inserted into the reader and the total sum of
the purchase is quickly and accurately deducted
from the card.

12. New Taxation System
If this economic system
exists, govt. Can charge
tax on every transaction.
Even a tax of 1-5% of the
tax would provide the govt. a revenue which
is more than what it gets now. A Single
Tax Scheme thus would be generated.
And no Tax can be stolen.

13. Working of new system
Every individual is required to have bank
accounts. These accounts would operate on
Internet Banking and other digital forms. Since
almost no cash would exist, people will use
digital cash for their everyday transaction.
Once a transaction is made, government can
charge tax on the transaction. And the
successful transaction would occur.

14. Receiver
Taxes To The
Government
Payer
Electronic Transfer
Deduction of 1-5%
Working Of The New System

16. Advantages
• As the economy is cashless, a lot of paper will
be saved that would have been used for
making currency. This would be a great step to
sustainable development.

17. • Many crimes like corruption, kidnapping and
extortion require cash. In a cashless economy,
no such crimes would have their existence.

19. As a computer would be looking at transactions
and charging the tax, A lot of government
revenue will be saved as there would be no need
of departments like Income Tax, Excise Duty etc.
In short, there will be no need of Indian Revenue
Services.

20. • As the entire money is digital, no terms like
Black Money, Green Money would exist. No
tax would be stolen as tax would be directly
charged at the time of transaction itself.

21. • Many problems of people would be solved as
their would be one tax scheme. People will no
more have to worry for different kinds of
taxes.
• Now everybody would be charged tax. There
would not be anyone left who could say that
he doesn’t pay tax.

24. Limitations and Disadvantages
• For this system to work, there should be
registered bank accounts of every person.
India is lagging a lot in this aspect.

25. • A Digital System means a lot of power
(electricity) is required for this system. India
still faces a lot of power shortages. After this
system, power requirements would be
increased to almost twice of what it is now.

26. • For this system to work, one of the foundation
requirements is that every citizen is literate. In
India Kerela is the only such state.
• It is required that every
shopkeeper, vendor, taxi
driver should have
machines and gadgets
to accept the transaction.

27. • The greatest harm to this economy is hackers.
If somehow the economic system is hacked,
hackers can do every possible thing. Any one
can become rich from rag or rag from rich in
just a few seconds.

28. Solutions always exist
• Even if people are not literate, they can learn
to operate the electronic purse.

29. • Hacking problem can be solved by ideas like
one time passwords(OTPs) and security can be
made more difficult to cross.
• All the locales would install the required
machines to accept transaction as the
necessary change generates itself.

31. • Once the economic system comes into
existence, more and more people would join
this system, given its advantages. Awareness
would compel them to open up with bank
accounts.

33. Practical examples
Following countries have practically applied this
new economic system:
Kenya
• The biggest African user of mobile money is
Kenya, where there are 15 million subscribers
to M-Pesa. Though originally a method to send
money home from cities to families in rural
areas, M-Pesa is widely used for many things
from receiving salaries, to paying bills and
school fees, slowly making cash obsolete.

35. • As of January 1, 2013, no more new Canadian currency
is being printed. Why? Firstly, there has been a
decrease in demand for new bills.
• Secondly, the plastic bills have a longer life expectancy.
The biggest reason: a push toward driving a cashless
future. According to a poll by PayPal Canada, 56% of
Canadians already would prefer to use a digital wallet
than cash. Also, Canada is a world leader in plastic
payment, where payment by credit, debit and bank
cards is almost 70 per cent compared to a world
average of 40 per cent.

36. • Though one of Africa's poorest countries, a
mobile revolution has created an informal
electronic banking system with more efficiency
and convenience than many far more developed
countries in the world.
• Cash is disappearing and there is no need for
credit cards because even street vendors accept
payments by mobile phones. A survey in 2012
found that the average customer made 34
transactions per month on their mobile phone
higher than almost anywhere in the world.

38. Australia
Singapore
Hong
Kong
US
Nigeria

40. The Problems That exist in modern economy
would no doubt won’t exist in the new
cashless economy. But as it is clear, the
proposed economic system will also come
with some of its own small problems. As it is
said: “Change is the only Constant thing in the
world”, its looking like that the time has come
for us to shift from modern economic system
to the new economic system. This change is
required now and will soon become a
necessity

41. • Google.com
• Wikipedia.org
• Enchantedlearning.com
• Google Images
• Teachers
• Social Media
• Noblesearch.com