Making digital payments pays. If the government is serious about its plans to give a 2 percent incentive over the applicable GST tax rate in case of digital payments where the bill is up to Rs 2,000, the move would also help discourage cash payments.
Sources told The Times of India (TOI) that the proposal intended to give benefits in the form of discounts or cash-back, is being discussed between the finance ministry, RBI, cabinet secretariat and ministry of electronics and IT.
The idea was said to have been raised at a recent meeting which analysed digital payment transactions post demonetisation last November, said a TOI report on Monday. The meeting was attended by IT minister Ravi Shankar Prasad and senior officials from other wings of the government, including the finance ministry and the cabinet secretary's office.
"The idea is to incentivise all kinds of digital payments, especially smaller transactions, in line with the government's plan of making India a less-cash economy," a source told TOI. The IT ministry is leading the government's efforts on digital payments and has been taking stock of initiatives to further popularise electronic payments, the report said.
The relief is being mooted for smaller transactions of upto Rs 2,000 as these are larger by way of volumes and mostly preferred through cash mode. Any incentive here will provide impetus to digital payments.
The source said that transactions of up to Rs 2,000 are very high in volumes and any incentive here will provide impetus to digital payments. This would also facilitate the entry of more people within the formal economy, and help play a credible part in countering the development of black money.
The nature of the route through which the incentive of 2 percent would be provided was not clear, the source told TOI, adding that the issue is being discussed in the finance ministry.
More initiatives are being considered by the government to further encourage digital transactions, especially when electronic transaction volumes have fallen over the past few months as the availability of cash post demonetisation improved.
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