Devangshu Datta hits the nail on the head in his piece, “The cost of cashlessness” (December 24), as he narrates the “inside” story of the government’s project to hastily implement cashless transactions in India. Datta succinctly highlights the plight of the end users of a plethora of cashless services that the government is keen to implement as part of its plan to curb money in circulation (M3) by reducing the cash-gross domestic product ratio from nearly 12% to around four%.
Datta writes that the government would soon be able to refurbish its revenue kitty and broaden the national tax base by extraordinarily publicising cashless transactions while bearing negligible cost.
It seems the government wants to build a cashless society without implementing social security schemes or ensuring the privacy or data security of e-transactions, as is the norm in prosperous countries such as Sweden, Germany and the US.
The question is: Why does the government not talk about offering these prerequisites for ushering in a cashless economy and instead pushes it through coercive means?
Governments in India have largely relied on concepts borrowed from abroad to generate revenues even as these came at a cost to the masses. A case in point is the imposition of service tax in 1994, which was “imported” by then finance minister P Chidambaram and introduced on a trial basis, with the tax rate being kept as low as five%.
Since then the country has been witnessing an upward trend, more so when it has proved to be a revenue milch cow with almost a nil negative list.
While going cashless may be a win-win for the government, service providers (making profits from MDRs), merchants (earning profits from these transactions) and telecom service providers (traffic generated by a large number of transactions), it would be the opposite for end users.
Datta writes that the government would soon be able to refurbish its revenue kitty and broaden the national tax base by extraordinarily publicising cashless transactions while bearing negligible cost.
It seems the government wants to build a cashless society without implementing social security schemes or ensuring the privacy or data security of e-transactions, as is the norm in prosperous countries such as Sweden, Germany and the US.
The question is: Why does the government not talk about offering these prerequisites for ushering in a cashless economy and instead pushes it through coercive means?
Governments in India have largely relied on concepts borrowed from abroad to generate revenues even as these came at a cost to the masses. A case in point is the imposition of service tax in 1994, which was “imported” by then finance minister P Chidambaram and introduced on a trial basis, with the tax rate being kept as low as five%.
Since then the country has been witnessing an upward trend, more so when it has proved to be a revenue milch cow with almost a nil negative list.
While going cashless may be a win-win for the government, service providers (making profits from MDRs), merchants (earning profits from these transactions) and telecom service providers (traffic generated by a large number of transactions), it would be the opposite for end users.
Vinayak G Bengaluru