India first nation to subsidize online payments
India has become the first country in the world to subsidise the use of digital cash after the government announced measures like discounts on online payments for insurance policies, rail tickets and highway toll charges and waiver for service tax on online transactions below Rs 2,000. In countries like US, Sweden and Singapore, the inducement to use electronic modes of payment often came from businesses waiving processing charges rather than from the government as in India. According to the study conducted by Google and Boston Consulting Group, digital transactions in India have seen a 50% year-on-year growth. This growth is likely to accelerate with demonetisation.
An economy in which all transactions are carried through electronic channels such as credit and debit cards, electronic clearing etc is called as cashless economy. The flow of cash in such economies is nonexistent or bare minimum.