Government is considering a 2 Percent Relief on Digital Payments

The government has gone a step ahead with promoting ‘Digital India’ by mulling to give a 2 percent incentive on the GST rate in the case wherein a payment of up to 2,000 is made through the digital mediums. If the sources are to be believed, then the proposal is being deliberated upon between the finance ministry, RBI, cabinet secretariat and ministry of electronics and IT. The proposition might extend the benefits by means of discount or cashback.

“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,” an official stated. All the efforts of the government regarding electronic payments are being led by the IT ministry and it has been undertaking various initiatives in order to promote the digital payments.
A meeting was held recently to examine the transactions taking place via electronic payment mediums post demonetisation. The meeting was joined by the IT minister Ravi Shankar Prasad along with other senior dignitaries from various departments.

“Transactions of up to Rs 2,000 are very high in volumes and if an incentive can be given here, it will provide an impetus to digital payments while facilitating the entry of more people within the formal economy. This will help plug leakages while playing a credible part in countering the development of black money,” the official mentioned. However, there isn’t much clarity pertaining to the route which would be taken by the government in order to provide the relief of 2 percent. “The matter is with the finance ministry.”

In addition to this, the government is taking continuous initiatives in order to push electronic transactions. “There will be new measures that will be announced on this front in the coming time to strengthen the government’s resolve on the electronics payment front,” the official added.

Since demonetisation till early March this year, there was a substantial increase in the usage of electronic transactions. However, after March a fall in digital transactions is being witnessed, courtesy the availability of cash.

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