Cashless Transactions Current Affairs - 2020

Union Government constitutes Amitabh Kant Committee to push cashless transactions

The Union Government has constituted a new committee to form a strategy to expedite the process of transforming India into a cashless economy.

The committee will be headed by Niti Aayog CEO Amitabh Kant. It has been tasked with identifying various bottlenecks affecting access of digital payments.

Terms of Reference of Committee

  • Identify and operationalise in the earliest possible time frame user-friendly digital payment options in all sectors of the economy.
  • Identify various digital payment systems appropriate to different sectors of the economy and coordinate efforts to make them accessible.
  • Engage regularly with Central ministries, state governments, regulators, local bodies, district administration, trade and industry associations to promote adoption of digital payment systems.
  • Estimate costs involved in various digital payments options and oversee implementation of measures to make such transactions between citizens and government cheaper than cash transactions.
  • Implement an action plan on advocacy, awareness and hand-holding efforts among public-, micro-enterprises and other stakeholders.

Background

The committee was set up following a directive from the Prime Minister’s Office (PMO) to back up the demonetisation move. The Union Government is working towards moving all government transactions to the cashless mode, through a new single window e-payment system that businesses or individuals can use to make payments to any central or state department.

Union Cabinet gives nod to incentivise cashless transactions

The Union Cabinet has given its approval for introduction of steps for promotion of cashless payments (transactions) through cards and digital means.

In this regard, various short and medium term measures have been approved for implementation by the Government Departments, Ministries and Organisations.

The essential feature of the approved proposal include

  • Steps for withdrawal of surcharge, service charge, convenience fee on digital payments or card imposed currently by various Government organisations.
  • Introduction of appropriate acceptance infrastructure for cashless payments in Government organisations.
  • Rationalisation of the merchant discount rate (MDR) on telecom service charges and card transactions for digital financial transactions to promote mobile banking.

This move aims at reducing cash transactions in order to minimize tax avoidance and migration of Government payments and collections to cashless mode.

With this decision, Union Government has completed its promise for such measures that were announced in the 2015 Budget as one way to curb the flow of black money is to discourage cash transactions.