The finance minister said that a shift to digital payments has huge benefits for the common man. The earlier initiative of the government to promote financial inclusion and the JAM trinity were important precursors to the current push for digital transactions, the finance minister added.
To promote cashless transactions, the finance minister in the Budget proposed exempting BCD, Excise / CV duty and SAD on miniaturised POS card reader for m-POS, micro ATM standards version 1.5.1, fingerprint readers / scanners and iris scanners. He also proposed to exempt parts and components for manufacture of such devices, so as to encourage domestic manufacturing of these devices.
To strengthen and regulate the digital economy, the finance minister has proposed to create a Payments Regulatory Board in the Reserve Bank of India (RBI) by replacing the existing Board for Regulation and Supervision of Payment and Settlement Systems.
The Committee on Digital Payments constituted by the department of economic affairs has recommended structural reforms in the payment eco system, including amendments to the Payment and Settlement Systems Act, 2007. The government will undertake a comprehensive review of this Act and bring about appropriate amendments, Finance Minister added.
To strengthen the digital payment infrastructure and grievance handling mechanisms, the finance minister said in his Budget Speech that the focus would be on rural and semi urban areas through post offices, fair price shops and banking correspondents. He added that steps would be taken to promote and possibly mandate petrol pumps, fertiliser depots, municipalities, block offices, road transport offices, universities, colleges, hospitals and other institutions to have facilities for digital payments, including BHIM App.
A proposal to mandate all the government receipts through digital means, beyond a prescribed limit, is under consideration. The government will strengthen the Financial Inclusion Fund to augment resources for taking up these initiatives, the Finance Minister added.
The finance minister said that increased digital transactions will enable small and micro enterprises to access formal credit. He said that the government will encourage SIDBI to refinance credit institutions which provide unsecured loans, at reasonable interest rates, to borrowers based on their transaction history.
He assured the House that the government will consider and work with various stakeholders for early implementation of the interim recommendations of the Committee of chief ministers on digital transactions.