Panel head Chandrababu Naidu handing over the interim notes ban report to PM Modi. (PTI)
Highlights
- Chief Ministers' panel recommends cap on big cash transactions
- Invesntivise digital transactions, give tax rebate to consumers: panel
- Confident the recommendations will reflect in Budget: Chandrababu Naidu
Cash withdrawals of Rs 50,000 and above from banks should carry a transaction tax, the Chandrababu Naidu-led chief ministers' panel to promote digital transactions recommended in its interim report to Prime Minister Narendra Modi on Tuesday. The Congress-led UPA government, in 2005, had to withdraw a similar initiative after severe backlash. "At that time, there was no digital infrastructure and that's why the move was resisted. Now, we have digital transactions and mobiles, which will make it very easy," explained Andhra Pradesh Chief Minister Chandrababu Naidu.
The panel also proposed that a subsidy of Rs 1,000 should be provided to all non-tax paying assesses and small traders for purchasing smartphones along with a lower or zero merchant discount rate - payable to a bank by a business for providing credit and debit card services - for all digital payments. It also suggested a cap on cash in all big ticket transactions.
The interim report also suggests that all government agencies should immediately switch to digital modes of payment and Aadhaar should be made the primary identification of customers. For this purpose, the panel further recommends the provision of Aadhaar Pay and Biometric sensors at a 50 per cent discount to all merchant points.
Merchants should also be encouraged to accept digital payments and consumers should be provided tax benefits for using digital payment upto a certain proportion of their annual income.
Mr Naidu said that digital currency has an advantage since it has no cost of printing, movement and security, as is the case with physical currency. He also suggested insurance for all digital transactions to safeguard the interest of people going cashless.
The Andhra Pradesh chief minister further said that he is confident that these recommendations will be incorporated in the upcoming Union budget on February 1.
"I am very confident," Mr Naidu said.
The committee will now focus on cyber security and securing the citizens' right to privacy.
Other than Mr Naidu, the chief ministers' panel on demonetisation comprises of Odisha's Naveen Patnaik, Maharashtra's Devendra Fadnavis, Madhya Pradesh's Shivraj Singh Chouhan, PK Chamling from Sikkim and V Narayanasamy of Puducherry along with NITI Aayog Vice-Chairman Dr Arvind Panagariya and CEO Amitabh Kant.
(With inputs from PTI)