Infosys Co-Founder Nandan Nilekani on Wednesday said he is not an economic expert to comment on whether demonetisation had resulted in RBI forecasting a drop in growth rate for 2017 fiscal, but stated that the bulk of merchant payments should turn cashless, which could result in getting the country’s economy on right track. Bulk of India’s transactions are merchant payments and that has to become cashless and that cannot be done in a historical system because the card system is designed for top-end users,” he said at an interaction at the Carneige Global Technology Summit 2016.
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He was speaking on “Road to Cashless Economy: How Government, Regulation, Technology and Markets Come Together”. He said “The phone-based and technological infrastructure like Unified Payment Interface will allow a rapid proliferation of cashless payments at the neighbourhood kirana stores, and that hopefully will get accelerated now.If we do that, then we can get our economy right”.
Earlier in the day, RBI Governor Urjit Patel had kept the short-term lending rate unchanged even as the central bank lowered GDP growth rate to 7.1 per cent and short term disruption in economic activities due to demonetisation.
Nilekani said cashless merchant payments is not the only way of solving the cash problem, but also is the way of reigniting the economic growth by removing frictions in the path of purchasing decisions.
Earlier in his speech, he said deployment of financial digital technology will be enforced rapidly because of the political will to have a plan on cash business in right place.
Availability of infrastructure – smart phones, payment technologies, wallets, Unified Payment Interface etc – is another reason for rapid deployment of financial digital technology, Nilekani said.
“The country is going to see some exciting times ahead if the infrastructure like smart phones, payment technologies, wallets, Unified Payment Interface etc, fall together in right place,” he said.