Raghuram Rajan left his Governorship of the Reserve Bank of India, but during his tenure a project had initiated, called Unified Payments Interface, in a step towards a cashless economy for the country. Fortunately, unlike most Government projects, this one is coming true.
The Unified Payments Interface (U.P.I.) is a simple yet effective method of carrying out financial transactions between the consumer and the merchant, between two individuals or between two banks, both online and offline. It removes the hassles of credit card details, e-wallet passwords, banking details etc. Aiming to promote a more user-friendly transaction system. Many of the leading banks of the country like Canara Bank, Axis Bank, ICICI Bank have already adopted the usage of U.P.I. and integrated it into their existing systems of payments.
To acquire the application, all you have to do is download the application from your relevant mobile application store. Usage of smart phones is increasing everyday in the country, with the number at an estimate of 1 billion. U.P.I. can help bring every single of these users under a single method of payment and of course, uninterrupted transactions 24/7, 365 days a year (Current popular methods of transactions like National Electronics Funds Transfer, N.E.F.T. are not functional on bank holidays. Whereas U.P.I. will be.). The current limit to the transaction is Rs.1 lakh which will be increased later when the system has been successfully adopted by the people.
Banks are authorized to levy a small fee on conducting transactions online, nothing like this has been done for U.P.I., yet.
U.P.I consists of a virtual address that is set up by the user itself. The virtual address can be anything, from your phone number to any kind of character combination that you want. All you have to do while conducting a transaction is send the virtual address to the person sending the funds. Only after confirming on both ends will the transaction be carried out therefore the system is secure from malpractices.
The broader objective for the government is also achieved. The most important issue, tax evasion can be alleviated using this system. Since the R.B.I. is aiming for a cashless economy, every single rupee that you or anybody who spends using this system is tracked, even transactions as low as Rs.100 will be recorded and therefore the accused cannot claim otherwise. Therefore, the U.P.I. will not only fight tax evasion but also increase the revenue of the state. As the finance minister, Arun Jaitley said,“Tax rates can be lower if Tax evasion is lower.”
It is a step in the right direction, innovative ideas like these are what are required. Only if we provide a different, more liberal and consumer friendly market will the dream of ‘Make in India’ come true. We have to be different, show the world that we can and have the capability to develop the country and only then will companies and manufacturing will take place and increase the development of our economy.