New Delhi, December 16, 2016: The government declared that the cash shortage induced by demonetisation of high value currency notes would end by mid-January by which time about Rs. 3 trillion of black money would be sucked out of the economy, leaving about Rs.12 trillion in cash to finance normal transactions.
This assurance was held out by Amitabh Kant, CEO, NITI Aayog, while addressing FICCI’s 89th Annual General Meeting at the opening session on ‘Digitization Imperative for India’. Kant said that disruption in the economy was inevitable as India aspires to have become a $10 trillion economy.
Kant heads the high-level committee set up the government to identify all possible modes of digital payment across sectors as it pushes on with its drive towards a cashless economy. The committee is well on its way towards establishing and monitoring an implementation framework with strict timelines to ensure that nearly 80% of the transactions in India move to the digital-only platform.
He emphasized that for sustaining a 7.5% growth, digitization is important as India cannot afford to have a parallel economy generated by high level of cash transactions.
Kant said that India is the only economy in the world with 1 billion biometric authentication and 1 billion mobile phones. He assured that India has the digitization infrastructure to leverage the JAM trinity ie. Jan Dhan, Aadhaar and Mobile.
Aadhaar enabled payments, he said was the biggest disruption in India. Nearly 30 crore people in India without mobile connections can use Aadhaar and thumb impression or Iris connection for digital payments and gave the example of ration shops in Jharkhand which efficiently use the Aadhaar enabled payment system and also act as banking correspondents.
He stated that in next 6-7 months every smartphone user would be able to make Aadhaar based payment using a device based on inter-operating system. He said that as India moves towards digitization the transaction cost would come down.
Kant said that various incentive schemes have been provided aimed at promoting digital payments such as ‘Lucky Grahak Yojana’ and ‘Digi Dhan Vyapari Yojna’. He assured merchant-traders that in their move towards digitization there would be no harassment by tax official by way of scrutiny of the previous years of books of accounts. He said that cash handling would be expensive in future by way of a cess and transaction cost on digital payments would be minimal.
