With an aim to discourage cash transactions, Finance Ministry has invited comments from stakeholders on the Watal committee report on promoting digital payments, which has recommended a separate regulator to deal with issues concerning payment.
The ‘Committee on Digital Payments’, chaired by former finance secretary Ratan P Watal, Principal Advisor, NITI Aayog, has said that the overall objective of the government’s digital initiative is to halve the cash to GDP ratio from about 12 per cent to 6 per cent in the next 3 years. Watal also suggested putting a special emphasis on digital payments for recurring low value transactions and reducing custom duties on payments acceptance equipment. The committee was set up on August 23, to review the framework on digital payments to move towards a cashless society and was made public on December 29, 2016. The report suggested a host of fiscal incentives to promote digital transactions and suggested withdrawal of all charges levied by government departments and utilities on digital payments and making it mandatory for government departments and agencies to provide option to consumers to pay digitally.
On making regulation of payments independent from the function of central banking, report said that the Committee weighed two options on how best this can be implemented. The first was to create a new payments regulator and the other to make the current Board for Regulation and Supervision of Payment and Settlement Systems (BPSS) within RBI more independent. The committee has also suggested instituting awards to promote digital transaction. Following submission of the report on December 9, most of the recommendations have already been implemented by the government in its effort to make India a less-cash economy.
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