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Written Assignment / Case Front Page Format

Name: Akshay Bahety

Due Date: 05/1/2017

Class: C

Roll No: 340304

Subject: OM

Assignment No: 1

Topic: CPM/PERT Methodology

Title of the Assignment: Transformation of Indian Economy from Cash to Cashless Economy

Signature: (Of the student)

Marks out
of 15
Introduction
A cashless economy is one in which all the transactions are done using
cards or digital means. The circulation of physical currency is minimal.

India uses too much cash for transactions. The ratio of cash to gross domestic product
is one of the highest in the world12.42% in 2014, compared with 9.47% in China or
4% in Brazil.
The Vision-2018 for Payment and Settlement Systems in India reiterates the commitment of the
Reserve Bank of India (the Bank) to encourage greater use of electronic payments by all sections of
society so as to achieve a less-cash society
In January 1946, banknotes of 100 and 1,000 rupees were withdrawn and new notes of 100, 500
and 1000 rupees were introduced in 1954.
On 28 October 2016 the total banknotes in circulation in India was 17.77 trillion (US$260 billion).
In terms of value, the annual report of Reserve Bank of India (RBI) of 31 March 2016 stated that
total bank notes in circulation valued to 16.42 trillion (US$240 billion) of which nearly 86%
(around 14.18 trillion (US$210 billion)) were 500 and 1,000 banknotes. In terms of volume, the
report stated that 24% (around 22.03 billion) of the total 90266 million banknotes were in
circulation.
Between November 10 and November 27, banks reported exchange and deposits of demonetised
banknotes worth 8.45 trillion (US$130 billion) (exchange of 339.48 billion (US$5.0 billion) and
deposits of 8.11 trillion (US$120 billion)). During this period, an amount
of 2.16 lakh crore (US$32 billion) had been withdrawn by people from their accounts.[177]

Benefits of Cashless economy

Reduced instances of tax avoidance because it is financial institutions based economy


where transaction trails are left.
In Financial year 2015, RBI spent Rs 27 billion on just the activity of currency issuance
and management. This could be avoided if we become cashless society.
There will be greater efficiency in welfare programmes as money is wired directly into
the accounts of recipients. Thus once money is transferred directly into a beneficiarys
bank account, the entire process becomes transparent. Payments can be easily traced
and collected, and corruption will automatically drop, so people will no longer have to
pay to collect what is rightfully theirs.
1 in 7 notes is supposed to be fake, which has a huge negative impact on economy, by
going cashless, that can be avoided.
Reduced costs of operating ATMs.

In India, the ratio of cash to gross domestic product is 12.42% in GDP, which is one of the
highest in the world. It was 9.47% in China or 4% in Brazil.

A recent investigation from September found that 10 million


accounts held only Re. 1, as bank officials took matters into their
own hands to reduce their branchs share of zero-balance account
ACTIVITIES
PARTICULARS
Activities Time taken
Plan to create cashless economy
A 5 months
Measures to be taken
B 6 Months
Instruction to the bank
C 7 Months
Passing of bill in the parliament
D 8 Months
Bill accepted
E 4 Months
Bill Reject
F 3 Months
Issue of Debit/credit card
G 2 Months
Educating People
H 3 Months
Turning economy cashless
I 4 months

Activities Predecessor
A -
B A
C B
D B
E C
F C
G D
H E
I H,G
-
Network Diagram (All the data is in months)

F(3)
E(4) H(3)
C(7)
A(5)
B(6)

D(8) G(2) I(4)


So there would be two path:

A-B-C-E-F-H-I = 5+6+7+4+3+1+4 = 30 Months (Critical path)


A-B-D-G-I = 5+6+8+2+4 = 25

So the longest path would be the critical path

i.e. 1st path would be critical path that would be A-B-C-E-F-H-I WHICH WOULD BE 30 Months