A Study Report, By:
Harbans S Nagokay.
Jammu, December 8
Starting today, no one will be charged any service tax on use of credit or debit card for upto Rs. 2,000. As-Currently, we pay 15% as the tax on these transactions. The exemption is part of the government’s all-out initiative to steer the country away from a cash economy to digital transactions.
Yes! In fact; NandanNilekani, a high-profile member of the opposition ‘Indian National Congress party’ has joined a committee to map a path to digital payments. And, the tax breaks for using cards come exactly a month after Prime Minister NarendraModi used an unscheduled televised address to announce that 500- and 1,000-rupee notes would, just hours later, be illegal and same required to be deposited in banks till December 30.
In his drive to convert India into a cashless society, Prime Minister NarednraModi has appointed former UIDAI chairman NandanNilekani to map a path to digital economy. Nilekani is known for India’s biometrics-based unique identity program.
Nilekani and his 13-person committee are meeting to work out how to get more Indians to adopt digital payments, via everything from their own smartphones to point-of-sale machines in local villages, Bloomberg reported on Thursday.NandanNilekani is an Indian entrepreneur, bureaucrat and politician. He was the Chairman of the ‘Unique Identification-Authority of India’. After a successful career at Infosys, he headed the Government of India’s technology committee,The report further stated that while the nation had already rolled out its United Payments Interface, with hundreds of millions lacking phones or web access, a multi-pronged approach was needed to wean the nation of its dependence on cash.India has the underlying digital financial architecture in place to get this going. How quickly the government can reach everyone is a question of execution and speed,” Nilekani was quoted as saying in the report.Earlier in the week, Nilekani had also appreciated Prime Minister’s demonetization move and said that it would see a massive activation of digitization of financial services in the country. Else-on, Yesterday, the Reserve Bank of India disclosed that Rs. 11.5 lakh crore ($170 billion) or 75 per cent of the outlawed notes have been turned in already. Critics of the demonetization drive say this proves that the reform has failed at cracking down on black or untaxed money.The cancellation of high-denomination notes detonated a vast cash crunch: the withdrawn bills formed 86 per cent of the currency in circulation. The situation was exacerbated by a scarcity of new bills, though the government has reassured that conditions will improve by the end of the year. Banks continue to run out of cash within a few hours of opening and remain packed with people desperate for currency.
Various analysts say the cash shortage could end India’s run as the world’s fastest-growing large economy. But yesterday, the Reserve Bank of India unexpectedly did not lower its key policy rate.A few weeks ago, in another incentive for digital transactions, the RBI doubled the allowed balance kept in prepaid wallets from Rs. 10,000 to Rs. 20,000.India’s economy grew by an annual 7.3 per cent between July and September, the fastest for any large economy. Data from last month was discouraging, showing auto sales plunged and service-sector activity contracted.
On the other hand, faced with chaos after eliminating India’s highest value rupee notes, Prime Minister NarendraModi has roped in a billionaire from the ranks of his adversaries to help.NandanNilekani, a high-profile member of the opposition Indian National Congress party, has joined a committee to map a path to digital payments. India is trying to end its reliance on cash, especially in rural areas where almost every transaction is done in hard currency. It’s not the first time the former head of outsourcing giant Infosys Ltd. has tackled a national project — he spearheaded the country’s biometrics-based Aadhaar unique identity program.