Nagpur: Union transport and shipping minister, Nitin Gadkari has called on the traders across the country to adopt digital payments in their personal and business transactions to ensure robust growth of economy.
Gadkari was speaking during a valedictory function of the 2-day mega convention of traders in Nagpur here on Sunday.
Gadkari further said that traders have contributed a lot in the development of nation and economy; but even after 68 years of Independence, the country could not identify in which way the economy should go.
He further said that the government has committed itself to bring e-governance in all sectors and therefore it is imperative that public in general and the traders in particular embrace technology. Creation of cashless economy is one of the priority areas of the government and he sought support from the trading community.
He said that change is inevitable and people should adopt the change in order to remain in the main stream of the country.
He also urged the trading community to upgrade and modernise themselves and become a robust growth engine of Indian economy.
CAIT national president B C Bhartia and general secretary Praveen Khandelwal said that removal of different kinds of fees and charges on e-transactions and providing incentives for such payments, income tax benefit to people who pay their expenditure through debit or credit card and proposal to waive transaction charges for purchase of petrol, gas and rail tickets will certainly induce people to use debit and credit cards more frequently.
Both Bhartia Khandelwal said that proposal to provide incentives to shopkeepers accepting payments in business transactions through plastic money will encourage traders to embrace e-payment system.
However, the government should reduce import duty on card swipe machines and also ensure development of manufacturing facilities of card swipe machines in India. Currently, there are about 11 lakh sale terminals in the country which is too small.
Currently the banks usually charge 2 per cent on credit card and 1 per cent on debit card transactions which discourage people to embrace e-payments.
Both usage of digital payments and availability of more and more point of sales will complement each other for more usage of payments through cards.
A scheme of discounts in VAT tax payment to tax departments will further encourage the people to adopt e- payments in India, they announced.
Making a presentation, global head of Public Policy of MasterCard Ravi Aurora, said India is predominantly a cash-based economy, with less than 5 per cent of Personal Consumption Expenditure (PCE) of 70,000 crore transacted via electronic mode.
He further said that the true value of electronic transactions is maximized when cards are used at the point of sale, rather than as a transaction tool to withdraw cash.
For cardholders, more efficient payments means more in bank accounts and less in wallets, flexibility of payment options, account management and enabling purchases on the phone or the internet.
For government, the benefits are more with an enormous reduction in leakage from subsidies and support payments, increased tax revenue from a smaller grey economy and cost reductions from greater efficiency.
Amitabh Tewary said that benefits of a less cash society are well known in the form of its positive effects on economic growth as a result of increased trade and the opportunities to promote financial inclusion.
However, despite these known advantages, cash still dominates in India. Continued high cash usage has its ill effects in the form of shadow economy which hurts the ability of governments to efficiently collect tax revenues.
Additionally, the rise of cyber crime and growing concerns about the ability of governments to look through digital records adds to the unwillingness of many with criminal intent to let go of cash.
While benefits of digital payments are widely understood, the growth in acceptance infrastructure has not kept pace with the growth in cards and as such the government should also concentrate its focus on acceptance infrastructure as well, he added.