 "Watal panel suggests incentives, regulator for digital payment")
The government has suggested a host of fiscal incentives to promote digital transactions and a separate regulator to deal with issues concerning payment.
The Committee on Digital Payments, headed by former finance secretary Ratan P Watal, said that the overall objective of the government's digital initiative is to halve the cash to gross domestic product (GDP) ratio to six per cent over the next three years.
Among other things, it suggested withdrawal of all charges levied by government departments and utilities on digital payments and bear the cost of such transactions and mandate government departments and agencies to provide option to consumers to pay digitally.
Besides, there should be incentives for consumers to make payments (including payment of fines and penalties) to government electronically by giving a discount or cashback and enable consumers to make payments (including taxes) to government through suitable digital means like cards and wallets.
Watal, who is presently Principal Advisor, NITI Aayog, also suggested putting a special emphasis on digital payments for recurring low value transactions and reduce custom duties on payments acceptance equipment.
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.
“The vision of the committee is to set a road map for digital payments to grow substantially over the next three years,” the panel said in its report.
More From This Section
An ordinary Indian should have the choice to be able to safely, reliably and conveniently transact money digitally at a price which is affordable and at a place where needed. Over the next three years, it is the vision of the Committee to reduce the cash to GDP ratio from about 12 per cent to 6 per cent over the next 3 years," the panel said in its report.
On making regulation of payments independent from the function of central banking, it said the panel 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.
"While both the options would serve the intended objective, the Committee recommends that the BPSS be given an independent status which it today lacks by being a sub-committee of the Central Board of RBI," it said.
The committee also suggested institution of award to promote digital transaction.