E payments Current Affairs - 2020
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The minutes of meeting which had approved the demonetisation of Rs 500 and Rs 1000 currency notes has been revealed through RTI. The government had contested that demonetisation would help curb black money and a steep rise in Rs 500 and Rs 1,000 notes; check the circulation of fake currency and promote e-payments and financial inclusion.
Observations made by RBI
- RBI Directors had contested the government’s claim about curbing black money by highlighting that most of the black money is held not in cash but in the form of real sector assets such as gold or real estate and this move would not have a material impact on the assets.
- RBI Directors refuted the government’s argument about the growth in high denomination notes being much faster than the pace of economic expansion, by reasoning that when adjusted for inflation, the difference may not be so stark.
- RBI has stated that even though the incidence of counterfeiting is a concern, Rs 400 crore as a percentage of the total quantum of currency in circulation is not very significant.
Despite these reservations and disagreements, the RBI board had approved the demonetisation in larger public interest as it provided an opportunity to promote financial inclusion and digital payments. Further the government had assured the RBI directors that it would take measures to contain the use of cash and promote financial inclusion and electronic modes of payment.
Tags: Black Money • Counterfeiting • Demonetisation • E payments • Financial Inclusion
India was ranked 28th among 73 countries in 2018 Government e-Payments Adoption Ranking (GEAR). India has jumped by eight positions in this ranking from 36th in 2011 which reinforces country’s progress towards digital transformation. Norway has topped 2018 GEAR list scoring 89.7 points in seven categories.
It is an Economist Intelligence Unit (EIU) global Index and benchmarking study commissioned by financial services corporation Visa. It ranks governments by quantifying their e-payment capabilities based on various indicators. It evaluates extent to which major countries around world have adopted e-payment systems, based on digital platform. The ranking is based on seven parameters viz. Government-to-Citizen (G2C), Citizen-to-Government (C2G), Business-to-Government (B2G), Government-to-Business (G2B) transactions, infrastructure, socio-economic and policy environment.
India’s performance in 2018 GEAR
India leads B2G category, along with other countries like Australia, Singapore and South Korea. It also leads in G2B category as well, along with four other countries. It was ranked third C2G category, along with four other countries, while France and UAE has topped the list in this category. In G2C category, India still lags behind at 25th place. It was also ranked very low at 58th position in infrastructure and socio-economic categories. In the socio-economic category, India was ranked 60th out of 73 countries. In policy environment, it was ranked low at 40th.