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25
January 2017
The government must tax cash
transactions above Rs 50,000, abolish banks' interest on credit card
transactions, give tax refund to consumers on digital payments and extend Rs
1,000 subsidy on smart phones to promote a less-cash, digital economy, a panel
of Chief Ministers has said in a report. The Total Investment & Insurance
Solutions
"To curb use of cash for large
transactions consider a levy of banking cash transaction tax on transactions of
Rs 50,000 and above. Consider a cap on maximum allowable limit of cash in all
types of large size transactions," said the panel led by Andhra Pradesh
Chief Minister N. Chandrababu Naidu. The Total Investment & Insurance
Solutions
The interim report on promoting
"Digital Payments" was submitted to Prime Minister Narendra Modi on
Wednesday by Naidu and Chief Ministers of Madhya Pradesh Shivraj Singh Chouhan,
Maharashtra Devendra Fadnavis and Sikkim Pawan Kumar Chamling.
Naidu later held a press conference
to highlight the main points.
The report laid emphasis on the use
of Aadhaar and said this unique identity number must be made the primary
identity point for the "know your customer" (KYC) norms. It said the
existing Aadhaar law can be applied towards this. The Total Investment
& Insurance Solutions
The report sought to point out how
low in rankings India stood in terms of pay points for digital transactions
(like swipe machines with merchants) -- it is 1,080 per million people in
India, 16,602 in China, 7,189 in Mexico, 25,241 in Brazil and 31,096 in
Singapore.
Among its various recommendations,
the panel said infrastructure must be provided for the 1,54,000 post offices by
way of interoperable Aadhaar enabled micro-ATMs and subsidy of up to Rs 1,000
be extended on smart phones for non-income tax assesses or small merchants.
"All government sections like
insurance, educational institutes, fertilisers, public distribution system and
petroleum must switch to digital payments," it said. "Rural and urban
cooperative banks should be on-boarded to digital transactions mode
immediately."
In terms of Unique Identity Number,
the panel said all payment banks and correspondents, besides post offices, must
be interlinked to the Aadhaar-enabled payments system.
The panel said for the success of a
digital economy, all stakeholders must be on board -- large financial
institutions and telecom entities including regulators, with awareness creation
entrusted with microfinance institutions, NGOs, cooperatives, state-run units
and panchayati raj bodies.
As per the report, some of the
constraints listed by the panel in the adoption of a digital economy includes
attitudinal issues, hardware including payments acceptance infrastructure, data
connectivity and cyber security. It said cash transactions were also cheaper
than digital ones.
The high-powered panel was asked to
suggest measures to enable all sections of the population to migrate to digital
payments, and recommend measures to leapfrog to the advanced digital payment
systems of global standards. The Total Investment & Insurance
Solutions
It was constituted on November 30,
last year after the government demonetised Rs 500 and Rs 1,000 notes.The Total Investment
& Insurance Solutions
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