Further disincentives for cash dealings likely in Budget
19 Jan 2017
To keep up the momentum gained for a less-cash economy after demonetisation and restrictions on cash withdrawals, the government may announce major disincentives in the upcoming Budget for using cash.
The government may reduce threshold for quoting PAN card number for cash transactions from the current Rs50,000 to Rs30,000 to bring more transactions within formal economy, reports The Economic Times citing sources. The threshold for quoting PAN card details for merchant transactions could also be reduced.
In addition, the government may also announce cash-handling charges for cash payments above a certain limit.
These measures will help the government stay on track towards a less-cash economy as there are concerns that easing of cash withdrawal limits at banks and ATMs might take the economy back to the pre-demonetisation prevalence of cash.
Also, these steps may be necessary to promote a less-cash economy as digital payments cannot be encouraged through apps and PoS beyond a point due to poor infrastructure and lack of digital literacy in the country.
