Cash Still King in India Despite Digital Payment Growth
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Cash continues to be widely used in India, with cash in circulation growing over 16% in 2020-21 despite digital payments also surging. Cash is seen as a "precautionary" saving and store of value.
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Digital transactions are increasing rapidly, led by the Unified Payments Interface (UPI) platform. UPI processed over $1 trillion in transactions in 2022, accounting for 46% of global digital payments.
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Cash remains preferred for minor purchases like groceries and dining out, while digital is used more for large transactions. Falling deposit rates and expanded welfare benefits in cash have increased cash demand.
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Illicit cash still flows into political campaign coffers. Electoral bonds were meant to increase transparency but critics believe they have done the opposite.
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Cash is still widely used in real estate transactions, with 76% of recent home buyers having used at least some cash. Developers rely on politician support and favor.