The chief ministers’ committee on digital payments, set up by NITI Aayog at the end of November last year, has submitted its interim report to Prime Minister Narendra Modi.
It contains recommendations to promote the use of digital payments, mostly by incentivising digital modes of payment, building the necessary digital infrastructure and putting proper regulations in place.
Here are the three broad categories from the report, and some of the panel’s recommendations therein:
1. Make digital payments more attractive through incentives
Merchants who accept digital payments, for instance, should enjoy relief in prospective taxes, recommends the panel, and they shouldn’t have to worry about retrospective taxation in case of digital transactions. Also, consumers who pay digitally “up to a certain proportion of annual income” should benefit from tax refunds.
2. Build robust relevant infrastructure
This involves offering a subsidy of up to Rs 1,000 for smartphones for non-income-tax assessees and small merchants, and beefing up the 1,54,000 post offices with interoperable Aadhaar-enabled micro-ATMs. Also recommended is using the savings from digital transactions to start a fund for incentivising acquiring bank acceptance infrastructure creation in rural and semi-urban areas.
3. Formulate policy and instate regulatory changes
Part of this broad category is making Aadhaar the primary identification for KYC, curbing the use of cash for large transactions by introducing banking cash transaction tax on cash deals of Rs 50,000 and above, and switching government areas like insurance, fertilisers and PDS to digital payments.
(Read the report to know all of the committee’s recommendations.)
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