CMs Committee on Digital Payments presents interim report to the Prime Minister

The CMs Committee on Digital Payments led by the convener and Andhra Pradesh Chief Minister, Shri Chandra Babu Naidu has submitted the interim report on Digital Payments to the Prime Minister.

Important recommendations made by the committee:

• The panel has recommended a ban on cash transactions beyond a threshold and a tax on payments beyond Rs 50,000.


• It has recommended a subsidy of up to Rs 1,000 for smartphones purchased by those who do not pay income tax as well as small merchants in addition to lowering or doing away with the merchant discount rate or the fee paid on card and online transactions.
• The committee also said there was a need to strengthen security , expand infrastructure and increase awareness for greater adoption of digital payments.
• The panel has also proposed tax sops for domestic production of micro ATMs and biometric sensors, along with a subsidy of 50% to merchant points using Aadhaar Pay , which will use fingerprint or iris scan.
• The panel has also suggested that all 1.5 lakh post offices should have infrastructure to deal with Aadhaar-enabled micro ATMs and there should be inter-operability for banking correspondent via Aadhaar-enabled payment system.

Way ahead:

Some proposals related to disincentivising cash may find traction as the Supreme Court-appointed SIT on black money, too, had suggested a cap on cash transactions as well as a limit on how much an entity could hold in physical form. Although the proposal to levy a cash transaction tax has found support, a section within the government is not in favour of this as it believes incentives will yield better results.