Cash transactions - The bane of all Indian problems

Question

I feel that abolishing cash can improve the Indian economy. Completely transforming all transactions into electronic ones will help track source of all funds especially in case of troublesome transactions, increase government's revenue and simplify our lives. Imagine if we could just put our finger for finger print verification in an auto rickshaw and the amount is immediately debited to your savings account or credit card (account because you won't need a card anymore). The machine should give you options which account (s) you want debited. I feel if the government adopts it there is a tremendous market and job creation potential too.
To a large extent most economies have long been using plastic cash. But in India we still often use large amounts of cash. Imagine with electronic transactions, no unknown source funds, no black economy and tax evaders. And certainly the cost of an electronic format of money will be less than printing a metallic coin even of the smallest denomination. It's certainly not easy but no "change" is.
Bala

Answer 1

I am not sure if we are talking of the same scales. Will you buy a LCD television with say 1000 EUR cash? It won't be rare to see that happen in India. Though the government today insists on all financial institutions to ask for PAN cards (kind of tax identity cards) when somebody transacts for a value more than Rs. 49000 in cash this is merely useful in case of a check. And a person can easily make thrice a transaction of Rs. 49000.
It would be great if the government begins by saying that all currency notes and coins should be returned in the next 6 months to the banks to be converted into savings account balances. After 6 months the value of the currency will be only 75%. In 1 year the notes/coins will be worth almost nothing. I actually see another problem that people will panic and try to get converted as soon as possible.
Lakshmipathi, you are right that for the large rural population in India they earn only so much that it is spent the same day. But still they can spend the money in a place where their fingerprint is identified. Belgium for example uses the Proton card. It's a fantastic concept. You can load say 50 EUR into your proton card and pay it for a newspaper, a cup of coffee and such small expenses without having to swipe your card and sign.
There is one other important point I missed. Fake currency rackets which are bleeding the nations resources. One of the most important ways for a society to become more civilized and sophisticated is by adopting technology. Also, most solutions for human problems lie in technology or may be it's merely a matter of perspective.
Corporates have made an enormous difference in India. India could take a bite of the global cake thanks to it's emphasis on English skills and university level education. Many governments have indeed begun delivering online services and have embarked on e-governance projects after rubbing shoulders with the corporates. Cashless societies too can be created if the corporates were to take the initiative. And it's not another philanthropic asking from them. There's a potent market. All it needs is initiative from the bigwigs.
Bala