ฝัง
- เผยแพร่เมื่อ 5 ก.ค. 2019
- In a bid to promote cashless transactions, the government on Friday said businesses with annual turnover of over Rs 50 crore can offer low-cost digital modes of payments and no charges or Merchant Discount Rate will be imposed on them or their customers. Presenting the Union Budget for 2019-20, Finance Minister Nirmala Sitharaman also said two per cent tax deducted at source will be levied on cash withdrawals exceeding Rs 1 crore in a year from a bank account to discourage the practice of making business payments in cash. The Finance Minister said the Reserve Bank of India and banks will absorb these costs from the savings that will accrue to them on account of handling less cash as people move to these digital modes of payment. Lately, digital transactions using mobile payment firms are on the rise. For instance, Unified Payments Interface transactions have grown to 754 million in June 2019. IMPS and NETC transactions stood at around 171 million and 26 million, respectively. On this edition of the big picture we analyse India’s thrust towards a cashless economy.
Guests: Ajay Dua, Former Secretary, Ministry of Commerce & Industry,
Banuchandar Nagarajan, Former Consultant, The World Bank, Washington DC,
A. K. Bhattacharya, Editorial Director, Business Standard,
Anchor: Frank Rausan Pereira,
Mindmap
Cashless Economy
Introduction
* India-9gb per month use , 10% global internet users
* Cash in circulation- less by 4.5 trillion
* Businesses- Annual turnover over 50cr- low cost digital payment modes
* No charges or merchant discount(MDR) rates- them or customers
* To discourage cash business payments-2% cash deduction on source-cash withdrawals exceeding 1 cr rs in a yr
* Mobile payments on rise, upi transactions grown-754 million, imps-171 million, neft-26 million
Purpose
* Financial Inclusion
Steps taken so far
* Cash to GDP ratio -came down from 12%(2016) to 9%-First move- demonetisation
* Digital transactions-Increased Five times-0.7trillion(2013) to 3.5 trillion (2019) transactions
* NPCI created UPI- effortless fund transfer among banks- private players took advantage and popularised it
Benefits
* Popularisation of digital transactions
* convenience for Companies-daily basis to bulk daily workers
* Better multilevel compliance
* Tax collection machinery
* Efficient Recognition of economic activities
Constraints & Drawbacks
* Basic mode of transaction- security, privacy, urgency, no cyber threat fear
* Complete elimination nearly impossible
* Data localisation issues-what’s app which is trying to start v chat(Chinese) like transaction platform is unable to do so
* Probable GDP impact-0.5%to 0.6%
* Adaptation-unorganised sector, rural undeveloped sector, Poor & eldely- left out due to lack of education, training in digital literacy
* Financial burden on banks, companies
* At some point companies may transfer cost on consumers
* There are Ways and means of avoiding the 2% payment on 1cr so it must be a temporary measure
Materialisation of the move
* Potential known post demonetisation
* Move to make it mandatory-Penalty- 5000rs/day on non compliance of businesses
* Cost- RBI would bear the cost-as cash came down due to digital systems & technology
* Market and regulation
* Ppl should be Encouraged- getting them face to face to the benefits
* Bharat net-broadband-2.5 lakh villages-infra risks may be mitigated
* International- Sweden(Mecca of cashless transactions)- last 10 yrs cash reduced to 50%
* A long term incentivised system eg TDS etc
Incentives and Tech support
* Govt incentivised platform for private players-Insurance, pension transactions etc
* Expansion using-Big data analytics-credit score through transaction history
* Nandan Nilekani provided glimpse into future- to triple transactions- 73 recommendations- proper KYC, all govt transactions using digital payments, tolls
* Rural customer inclusion-payment of railway tickets, kisans
* Smart phones- going to increase manifold - 30% (present penetration)- digital customers will also multiply
* Creating supply and demand simultaneously-Create CICO (cash in cash out) machines-can work on SIM cards atms- require broadband connections, are bulky, difficult to build, establish & maintain - multiplier effect
* PPP
Way Forward
* We should move towards cashless economy but not giving centre stage to digital companies but taking care of consumer interests and ease
Conclusion
* Demography of India speaks of youthful digital natives keeping that in mind along with expansion to rural sector with the help of private sector hopefully this is made a reality in a couple of years
good job
Budget Provisions:
- Businesses with annual turnover of over Rs 50 crore can offer low-cost digital modes of payments and no charges or MDR will be imposed on them or their customers.
Payments to govt dept, ATM fillers, cooperative societies - exempted.
- 2% TDS will be levied on cash withdrawals exceeding Rs 1Cr in a year from a bank account to discourage business payments in cash.
- RBI & banks will absorb these costs from savings accrued from handling less cash.
- Digital transactions using mobile payment firms are on the rise.
- Unified Payments Interface transactions have grown to 754 million in June 2019. IMPS and NETC transactions stood at around 171 million and 26 million, respectively
Cashless economy:
- Before demonetization Cash to GDP ratio was 12%. Immediately it came down to 9% but it has grown steadily to 11% of GDP.
Circulation was growing @ 14% every year.
- Digital transaction, Credit cards, Mobile wallets, Debit card, PoS increase - In 2016 - 7 mn transactions, now its 21 mn.
Value of digital transaction was 0.7% which is now 3.5%.
- NPCI has created the digital infrastructure which is also used by private players - Paytm, Mobikwik.
- Companies have started offering Pensions & Insurance.
- Use of big data to analyse credit score by tracking past transactions.
Benefits of Cashless economy:
- Reduced use of cash - compliance level better
- Collection machinery efficient.
- GDP impact can be 0.5 - 0.6% - infrastructure need not to be created.
Challenges & disadvantages of Cashless economy:
- Securities & privacy issue.
- Cash Urgency
- Cyber threat
- Issue of financial inclusion - Poor & elderly left out due to lack of training.
- Digital Infrastructure: Bharatnet needs to speed up to strengthen rural infrastructure.
Nandan Nilekani Committee recommendations:
- RBI & government must target 10X growth in volume of digital payments in next 3 years.
- Simplification of KYC, removing transaction charges on digital payments to government.
- Payments tolls, railways, Kisan Credit Card - online.
- Create cash in cash out machines & not ATM
: Strengthening of Business Correspondent infrastructure and empowering small merchants to provide cash at POS to customers to meet their immediate requirements, especially in semi-urban and rural areas.
- Promote financial literacy.
Consumer must be centre of debate while discussing about digital transactions & cashless economy. We need to move towards less cash but must also make sure that no sections of the society is left out due to digitalisation.
awesome summarize the whole picture..thanku so much.
Thanks a lot
Start with The hindu too😊😋
Great job Shashi
@@sujit3375 I personally don't like The Hindu :p
Digitalization also needs securitization of accounts,privacy policy and reducing of cyber threat.
Such cadidness from Mr Dua at the end 😄
😑
My ans is also the same .
No difference 😂
Economics discussion is tough to understand each and every point
Greatest ever sir 💯👌
Tremendous
how the 2 % TDS would be deducted if a person withdraws a sum of more than 1 crore but from various bank accounts....?? pls answer
No
TDS of 2% is per account transaction and not per person. so if person have multiple accounts and total money withdrawal of each account remain below of 1 crores though the total withdrawal of all accounts goes beyond 1 crore then still that person doesn't need to pay 2%TDS.
What is the CICO machine being talked at 16:40 by Banuchandar Sir?
Strengthening of Business Correspondent infrastructure and empowering small merchants to provide cash at POS to customers to meet their immediate requirements, especially in semi-urban and rural areas
Thanks for the information 😅
So, what I'm not getting is are these cash in cash out machines those "cash recyclers" that are now a days used in banks where not only we can withdraw cash like ATMs but also deposit money?? I really am not getting the hold here is it something different?? He said it's sim card operated and atms work on broadband
@@subhamkumar3601 It is not any new machine as such. As mentioned in a comment above, Banking Correspondents will act like micro ATMs. Eg: Registered kirana shop owner can give cash to customers by swiping their cards on handheld POS devices(can be operated using SIM card rt?).
@@monootan thanks bro
Can anyone please give the complete schedule of THE BIG PICTURE🙏
How many episodes do they make in a week?
5 episodes a week, from monday to friday
please add cc
What is the report's name?
Its Nandan Nilekani Committee Report .
@@informedbeing3937 thanks
missing mr. poonawal 😂😂
Bhattacharya is speaking as if he is sitting at home 😛😂
*25:00** WHAT HE MEANS BY UK "AND" BRITAIN!*
Britain is largest island of UK,which is part of England and UK consists Scotland,Wales,north Ireland and England.
@Bhagya singh Gurjar Can't mess with them xD
enforcing all this is not good, ultimately it is my earned money and i should have all options to freely use it when I want and where I want. Modi with RTI amendment is now certainly curbing freedom in every sphere. Not cool.
No need for UPSC aspirants. all known points
Bjp govt has made the economy a big mess.
they did good job asshole