Finance Minister Arun Jaitley on Thursday said the government and the Reserve Bank are taking measures to bring down the digital transaction cost with an aim to move towards a less-cash economy.
Chairing the 5th Meeting of the Consultative Committee attached to his ministry, Jaitley said digital transactions are a parallel mechanism, not a substitute, for cash transactions and “cashless economy is actually a less cash economy as no economy can be fully cashless”.
He told the participating Members of Parliament (MPs) that the government is trying to encourage digitisation as much as possible because an excessive cash economy has its own social and economic costs and consequences.
Less cash, he said, can be gradually substituted to the possible extent through digital transactions. According to an official release, Jaitley said the Centre has announced various incentives to attract people to shift to digital mode of payment and the response is quite positive so far in this regard. Jaitley further said the government and the RBI have taken various steps to bring down the cost of digital transactions and specifically mentioned about MDR charges.
The Finance Minister added that 55 per cent petrol pumps in the country are accepting payment through digital means and with the government providing incentives, more people are switching to this mode. Jaitley further said the government is conscious of the need of cyber security of high level to secure digital payments.
He told the MPs that the government and RBI are fully aware of cyber security challenges and ensuring strong firewalls around the systems. As part of efforts to promote e-payments, the Finance Minister said the government is providing various incentives for digital transactions including on debit card use.
Regarding the availability of POS machines, he said POS machines are manufactured by two companies in China and the government has waived duties on them so that these machines become cheaper and reach the shopkeepers easily.
Expressing views, one MP cited the example of Bangladesh Bank heist and expressed the concern about cyber security if digitisation is done at such a fast pace.
The issue of virtual currency, bitcoins was also raised as they are believed to be used by black money hoarders. Regarding connectivity and infrastructure issue in rural India, suggestions were made to strengthen the institution of business correspondents. Some members raised the concern that Aadhaar alone should not be basis for bank transactions and banks should keep their KYC norms strict along with Aadhaar.
Some members also requested the Finance Minister to relax conditions for Tamil Nadu in view of recent cyclone that caused major disruptions in supply of electricity and internet connectivity. Suggestions regarding infrastructure for having internet facility on continuous/permanent basis, without disruption, has to be ensured for making digital payments successful especially in sub-urban and rural areas were also made.
Some of them suggested that security measures are required both in case of hardware and software in order to secure the data and transactions made through digital mode. Jaitley assured the members of the Committee about cyber security measures being taken by the banks under RBI supervision. He said the government was trying its best to minimise common man’s pain.
MPs who attended the meeting include Baijayanta Jai Panda, Dilip Kumar Mansukhlal Gandhi, Ram Charitra Nishad, Subhash Chandra Baheria, Supriya Sadanand Sule, Poonam Mahajan, Sharadkumar Maruti Bansode and Shri Suresh Chanabassappa Angadi (all Members of Lok Sabha).
Digvijaya Singh, Rajeev Chandrasekhar, Ranvijay Singh Judev, Sanjay Seth, Satish Chandra Mishra and Kumari Selja were among the Rajya Sabha MPs.