The march towards a cashless society

It has not even been a week since the big demonetisation announcement and people and institutions are still coming to terms with the impact. IMO, it should be a net positive for the country and accelerate the move towards a cashless society. In the past week, I managed to get my dentist to get started with Paytm and also pay for my haircut using the same mode. Nonetheless, going around with just Rs 60 in valid paper currency with no usable ATMs in sight doesn’t give one much confidence.

Controversies and short term cash crunches aside, I am really looking forward to the cashless future. I did a quick analysis of my expense modes for this year and around 83% of my transactions are cashless. I expect this will cross 90% pretty soon. Some of the outlets that were cash only like the local grocery stores and saloons have already started providing cashless options after the developments last week.

expense-2016

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Retirement savings plan post Budget 2016

Looks like the best retirement planning that salaried employees can do given the intentions of the government to tax the EPF (or interest on EPF), is to shut down the PF before the new rules come into effect and move the balance to a tax free account in a Swiss Bank. Then all you have to do is open up a Swiss or EU company and invest in a made in India food business back home. Given some of the entrepreneurial friendly policies being introduced of late, this can only mean a secure future post retirement.

Jokes apart, it seems that this EPF taxation plan is the first step of a bigger plan that is not going to get discussed till the uproar over the issue dies down. This policy pretty much ensures that voluntary PF contributions are going to stop and that can only mean more disposable income in the hands of the salaried.

So, not only does this increase the funds for the Swachh Bharat and Agriculture schemes, but also for the increased service taxes. In the long term, this means that government has lesser interest to pay out due the lower voluntary PF contributions, plus some of that interest goes back to their kitty thanks to the taxes.