Andhra Pradesh Chief Minister N Chandrababu Naidu has directed officials to look into a proposal to give free mobile phones to economically backward people to enable cashless transactions.
Naidu mooted the idea during a meeting with officials, including those from the Reserve Bank of India (RBI), and other bankers.
Stressing the need for digital transactions, the Chief Minister said the people who don't have mobile phones may be provided with free phones to move to a cashless economy.
Naidu said the current crisis created by shortage of currency notes of small denominations in the wake of November 8 demonetisation of high-denomination currency had underlined the need to go digital for financial transactions.
The Chief Minister was told by officials that mobile banking was possible even with feature phones and without Internet connections.
Last week, Naidu had asked the Centre to explore coming out with a Rs 200 note, as the common people were finding it difficult to get change for Rs 2,000 notes.
Earlier this month, the Telugu Desam Party (TDP) chief, who had long been demanding that Rs 500 and Rs 1,000 notes be abolished, welcomed the demonetisation.
He had said abolishing the big currency notes was necessary to check those who are buying votes and misusing the people's mandate.
Terming black money as the root cause for all the evils, Naidu said this could be curbed by abolishing cash and currency transactions and making all transactions through banks compulsory.