CAIT has urged the govt to implement incentivisation schemes to promote digital payments
The Confederation of All India Traders (CAIT) has urged the central government to take more steps to promote the use of digital payments in the country. In a communication to finance minister Arun Jaitley, CAIT has urged the ministry to promote and implement incentivisation schemes to promote higher usage of such payments and make the transition from cash payments to digital payments seamless.
Though prepaid cash card provider ITZcash.com has been around for a while (since 2006) promoting the use of digital payments, and wallet services like Mobikwik and Paytm have also joined the fray and contributed more recently, 96% of retail transactions in the country are still done through cash and only 3.6% of households use cashless methods of transacting financial payments. Indeed, though 60 crore debit cards are in active circulation, the vast majority of them are used to make cash withdrawals at ATMs.
Keeping that in mind the transition to a cashless economy seems a daunting task. However, if this is achieved, it will be a huge benefit. For one, it brings into the tax net a lot of transactions which have hitherto escaped tax. It also enables remittances back home for a vast under-served population which doesn’t own plastic through retail kiosks enabling digital remittances.
The finance ministry has issued guidelines for enabling cashless payments on February 29 and programmes like the Jan Dhan Yojana, Jam Trinity, Aadhaar, the Rupay card and mobile-enabled payments will also contribute to a cashless society. The PM has also appealed for greater use of digital modes of transactions.
However, CAIT national president BC Bhartia said, “there is a lot more to be done in the form of a nationwide campaign to promote awareness as well as an incentivisation policy to promote higher usage of cashless transactions.”
The latter includes providing tax and other benefits to industry, increasing the supply of Point of Sale (POS) terminals from the current 12 lakh, reducing their price by abolition of import duty on them as well as promoting local manufacture of POS terminals.