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.

Month: Current Affairs - February, 2016