Idea: for GOI to bring Digital India (finance) a Better Success

`Dear Government Of India,

To make your Digital India Program (Finance) draw more success, you must start some program like Self Imposed Digital (SID) Program. This will make individuals, self opt for digital transactions (and reduce cash) for want of benefits. And not only that, it will also have positive impact on our society.

That was the crux of this letter, if liked, read details below---
The BuildUp

The Idea
What is SID Program
Expected Benefits IN the SID Program
The Pre-Requisite
The Challenges
Analyzing The Challenges
Benefits OF The SID Program
Why I Wrote This

The BuildUp

I feel (Financial) Digital India Program will get more success if it's run with some lucrative incentive programs rather through euphoria of Nationalism or through fear of Tax-Men. Worth mentioning here that I'm neither Finance expert nor my work is anywhere related to Finance.
However, as an individual, I've an idea and I would like to present it to the government.

I have seen, heard and tried being more digital in my financial transaction, after PM's appeal. But somewhere during the course of my day to day activity, the euphoria died down and I end up on cash.
So I wondered why! Just digging a little, I found euphoria anyways isn't a sustained state and one get habituated soon with fear.
So at the end of the day, our daily transactions get motivated to profit/loss and most important, ease of performing those transactions.
Hence cash transactions, still, is a big motivator and it's presence refuses to reduce in our lives.
As a service class person, who has no trace of black in his money, I (an many others like me) also end up using cash.

The Idea

So what can we do to draw more people towards digital transactions.

Since we can't motivate people to go digital due to lack of ease, we can surly do things on profit/loss front to compensate. That is exactly the base of my idea. And I think it will work good (to a good number of people).
Let us begin with a question,
What is the best way of saving for most of the (lower to middle class) working folks in India?
Post-Office/Bank (skip gold for now) and the lucrative part of these financial institutions are the interest rate.

So Government has to just distinguish those individual's, who wish to declare themselves digital through Self Imposed Digital (SID) Program, with some visible higher benefits.

What is SID Program

Self Imposed Digital, or say SID, is a self declaration to impose on oneself to become digital in financial transactions, by signing and sending an affidavit to Center (through some central agency). And then that agency must ensure that such an option is updated against individual's PAN/AADHAR id and saved in some central server, which all banks must refer to.

• An individual commits to government that s/he will use only digital transactions in his/her day to day transaction.
• In other words it means that individual will not withdraw cash from his/her account
• As lifesaver, some x amount (eg 2k) of cash can be allowed per month per PAN/AADHAR id as cash withdrawal.
• So, the government legally gets approval to put cash cap of 2k (eg), for all bank accounts (including joint accs) linked to the individual's PAN/AADHAR id.
• The most important part 
• Benefits which an individual gets will be accumulated and paid, end of financial year.
• All benefits will be transferred to an individual only when the individual keeps SID enabled for full one continuous financial year. If any break in between, the benefit counter will be reset.
• The benefit which is referred is finally translated to money.
• This can be extended to corporate n Firms also.

Expected Benefits IN the SID Program

All those who opt for the SID program should get some Incentives from Government.
Examples of incentives are like this-

• Higher interest rate in Indian banks (public/private)
• like best interest rate now is 6.9, may be for those who opt SID will get 7.1.
• ppf which is 7.9, SID enabled will get 8.1.
• sukanya which is 8.4, SID enabled parents will get 8.6 (i.e. both mother n father opt SID)
• etc or as gov decides.
• allowed some cash per month per PAN/AADHAR id say 2k
• this 2k is needed as our digital infra is not that strong that we can handle all digitally, like paying a tip or auto fare, etc.
• this 2k may eventually be reduced as we get strong in infra (internet speed & easy payment mediums)
• Allow any number of transaction, on any bank, on any atm with no cap
• well the cap amount is in place, so how many time anyways a person can go to a bank atms
• Give Tax Benefit
• if enabled for full one financial year cycle, then give tax benefit like extra 50k saving allowed (apart from 1.5 + 50 nps) in next year's filing. Condition is individual should remain opted to SID for full next year also.
• Senior citizens benefit
• give them too some more interest on their cash deposits
• Many senior citizen rely on their pf amount's earning. They will surely go for this program
•  Surcharge be removed
• many outlets like petrol pump, electricity bill, etc take surcharge on digital/card payment. Those should be waived off.
• this be done, at least for debit card or India rupay card.
• Bank charges be reduced on accounts
• reduce bank charges for SID enabled account like sms update charges, online banking charge, etc.
• percentage reduction on charges be 40% or more. Let bank decide the more part.
• Restrict other gov benefits to SID enabled only
• may be like SID enabled individual can get limit + 1 cylinder on subsidy.
• in long run only SID users will get benefits like gas subsidy, etc.
• Easy opting out
• if someone someone wishes to opt out, it should be easily allowed.
• However user should be informed about the amount he/she saved due to SID adoption and information that individual will loose if full financial year isn't completed.

The Pre-Requisite

Some consideration for success of this program

• Central point of reference
• for all banks to refer which PAN/AADHAR id has this option enabled.
• individuals shouldn't be burdened to put this information to all bank.
• Bank Portal update
• all bank portal's should update SID status on individual's front/home bank page itself.
• Ensure to update individual on how much he/she saves after SID enabled
• this is very important and should be explicitly done. The information of one's extra saving brings in lots of feel good on one's decision and motivation to continue.
• All accounts which are without PAN/AADHAR id shouldn't be allowed to operate
• some time-limit should be given within which all bank accounts should be linked to either of PAN/AADHAR id.
• if joint account, all account holder's PAN/AADHAR id should be present.
• this idea will fail if we allow banking without PAN/AADHAR id.
• Ease of quick payment
• quick payment are those where individuals doesn't want to spend too much time, like paying auto/rickshaw fare, vegetable vendor, roadside food, etc.
• some break through concept should be brought in from Government which should do that quick payment, something like pre-loaded money card (equivalent to cash but not bank account linked), just punch n pay, instead going through phone apps.

The Challenges

Any program/incentive, people try looking for loopholes to exploit

• What if the earning hand opts SID for himself/herself and uses spouses or someone else's account for cash.
• Or what if the earning hand makes his family member (wife, mother, etc) to opt for SID and use their accounts, etc.
• Many other operational issue might also be there, which I'm unaware of.

Analyzing the challenges

• No scheme can be airtight. Some issues have to be lived with at least for couple of years.
• Slowly the practice will reduce or strict action like declaring/linking all family account kind of concept should be brought in.
• Such problem will be high in small cities where digital world is in it's starting phase, and people might be force to look for cash in absence of infra.
• Furthermore, the challenge has some benefits as well
• Benefit-1: Most of the earning hands are male, so they will have to transfer money in their non working wife's account or old parents account. Well this will en-power & secure them.
• Benefit-2: Fixed deposits & savings done in housewife's name or house's elderly's name, brings them a sense of security. As this account has to be individual's own account, can't be joint as other rules will come into play.
• Benefit-3: Money movement across account brings visibility of money & accountability of the account holders.
• Rule like Sukanya Smriddhi account requires both parents to enable SID, will reduce it to some extent.
• Some rules, if made, like in joint account if one has SID enables and others don't then restrictions of SID will be imposed but no benefits. Benefits will come only after all opt for SID.
• However, putting money in family members account is in a way good and secures those life who don't directly make an earning.

Benefits OF The SID Program

 Digital Impact

• The program will surely bring in some movement in the present/practiced financial transaction course. And good number of people will opt for it due to it's benefits. This will be a big solid leap forward towards non cash transactions.
• Those asking in cash will get less takers and big number of cash transactions will reduce. Like house rent in big cities will slowly move towards online transfer rather cash.
• The poor will also opt for getting account done and would try to learn going digital, for want of benefits.
• Street vendors will be forced to go digital as many customers might show inability to pay cash.
• Most of the earning hand will opt for this for want of benefit (interest rate, tax saving, etc)
• The younger generation, who live far from home to earn, will surely opt for this for want of benefits and will not have any loopholes to exploit as they won't have any non-earning family members around them.
• Online stores cash on delivery option will phase out (transparency in business)
• This will be an instant hit in metros n big cities, due to good infra & benefit

 Social Impact

• Housewife's, old parents, and the non earning family member will start to get money in their account and this will instill faith/hope/confidence in them.
• Eventually all those reluctant to learn new thing and feel their work isn't much affected even after not opting digital, will find right reason to go out, learn and adopt.
• More users will surge on online payment portal like BHIM. So the development of such apps will get robust and quicker.

This idea might not be perfect as I neither know nuance of finance nor the nitty-gritty of government policing, however this idea will surely being in more participation from public towards Prime-Minister's vision of Digital India.

Thanks