With an aim to encourage digital payments, the finance ministry on Friday set up a committee, headed by former finance secretary Ratan P Watal, to suggest measures to promote card payments through incentives such as tax rebates and cash back schemes.
The 11-member panel, with representatives from government departments, regulatory bodies, industry bodies and financial sector, will submit its report within one year.
Among others, it has been tasked to “study and recommend various measures to incentivise transactions through cards and digital means, e.g., through tax rebates/incentives, introduction of cash back/lottery, etc,” the ministry said in an order.
The panel has been asked to study and recommend the need for charges, if any, in various regulatory bodies in the context of promoting payments by digital modes, according to its terms of reference.
Among others, it will examine the use of the Aadhar platform for authentication of card transactions and setting up of a centralised KYC (know-your-customer) registry.
It will also study the feasibility of creating a payments history of all card/digital payments and ensure that merchants/consumers can leverage the data to access “instant, low cost micro-credit” through digital means and create necessary linkage between the payment history and credit information.
It will also look into the scope of integration of all government systems such as public finance management system, PayGov, Bharatkosh and eKuber.
Earlier this month, the government had said it would bear transaction costs for all payments made to it through debit or credit cards and net banking. The move to incentivise card transactions is aimed at curbing the flow of black money. The Centre is also considering a proposal to ban cash transactions above Rs 3 lakh.