Make digital payment cheaper, says CM's panel

A committee of Chief Ministers set up to look into ways to migrate people to digital payment on Tuesday suggested that electronic payments be made cheaper than cash. A week ahead of the Budget, it also recommended that cash transaction above Rs 50,000 be taxed in order to discourage people from resorting to cash dealings.

“Digital transactions are costlier than cash, we must make it cost effective and stregthen cloud servers on the bank side,” Andhra Pradesh Chief Minister Chandrababu Naidu, who heads the committee said after submitting an interim report on Digital payments to Prime Minister Narendra Modi.

The panel also suggested a subsidy of Rs 1,000 to non-income tax assessees and small merchants for smartphone purchases. It said that tax incentives must be extended to Micro ATMs, domestic production of digital devices. The committee also recomended that subsidy payments be solely based on digital mode.

“India has strong infrastructure and one of the best Aadhar-enabled payment systems in the world which is besed on fingerprints,” Naidu said, calling it a low hanging fruit in course of the switchover to digital mode.

He, however, suggested that the government must make certain regulatory changes to promote adoption of digital payments. He said that the government must take the first step towards it and all educational institurions, state-owned insuance companies, petroleum and fertiliser sectors should imediately switch to digital mode of payment. The committee also recomended that subsidy payments be solely based on digital mode.