CM Panel on demonetisation pushes for digital transaction

RSTV Bureau
File photo of Andhra Pradesh CM Chandrababu Naidu.  Photo - PTI

File photo of Andhra Pradesh CM Chandrababu Naidu.
Photo – PTI

Submitting its interim report on the demonetisation, the Chief Minister’s panel recommended Rs 1,000 subsidy for purchase of smartphones by non-tax assesses and small merchants, and a cash transaction tax on withdrawals of Rs 50,000 and above in banks to encourage digital payments. The Centre on Wednesday said it will “carefully examine” the reccomendations.

However, the recommendations came in for criticism by the CPI(M), party in the Opposition bloc, which termed the recommendation to levy tax on cash withdrawals of Rs 50,000 and above as coercing people to pay heavy costs for turning digital.

Among the other recommendations, the panel, led by Andhra Pradesh CM N Chandrababu Naidu, also made a case of lower/zero merchant discount rate (MDR) for all digital payments to government entities and cap on cash in all type of big ticket transactions.

The ‘Merchant Discount Rate’ is charged to a merchant by a bank for providing debit and credit card services.

The committee comprising Maharashtra Chief Minister Devendra Fadnavis and Madhya Pradesh Chief Minister Shivraj Singh Chouhan has also asked the Centre to promote Aadhaar Enabled Payment System (AEPS) by incentivising and not charging MDR.

ATM-gen

The other recommendations include tax incentives for micro ATMs, biometric sensors etc. and tax refund for consumers using digital payment up to a certain proportion of annual income.

Explaining about advantage of digital payments, Chandrababu Naidu said he was “confident” that all the recommendations will be incorporated in the forthcoming budget on February 1. There are lots of cost in handling physical currency because of its printing, movement and security while there is no such cost for digital currency, he said defending his reccomendations.

The panel said in its interim report that all payment banks and banking correspondents should be made interoperable through AEPS and also provide infrastructure for 1,54,000 post offices by way of interoperable Aadhaar enabled Micro-ATMs.

Naidu also suggested insurance for all digital transactions to safeguard the interest of people going cashless.

Meanwhile, criticising a part of recommendations, CPI(M) general secretary Sitaram Yechury said that the recommendation comes at a time when furnishing PAN is already mandatory for transactions above Rs 50,000.

“Condemn such coercion to force people to turn digital & pay heavy transaction costs. For monitoring, transactions above 50K already has PAN,” Yechury tweeted.

(With inputs from the PTI)