The Committee of Chief Ministers, headed by Andhra Pradesh Chief Minister N. Chandra Babu Naidu submitted recommendations on encouraging digital economy to Prime Minister Narendra Modi in New Delhi.
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The Committee on demonetization has recommended abolition of the Merchant Discount Rate charges (MDR) to incentivize the digital transactions. It has also suggested putting a curb on large transactions and wanted levying of banking cash transaction tax on Rs. 50,000 and above. Capping on maximum allowable cash limit in all types of large transactions is another key recommendation of the committee. It suggested measures to enable all sections of the population to migrate to the digital payments.
The Panel has suggested to bring all government insurance, educational institutes, fertilisers, PDS and petroleum sectors within the ambit of digital payments.
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Other recommendations:
1. Aadhaar-enabled micro ATM infrastructure in all the 1.54 lakh post offices. CM also said that the non-income tax payees and small merchants should be given a subsidy of 1,000 rupees for purchasing smart phones.
2. There should be no retrospective taxation to merchants doing digital transactions.
3. Mr Naidu said digital transactions are cost-effective compared to physical currency. The biggest constraint in the exercise is attitudinal changes in the people.
The committee was constituted on 30th of November 2016 to prepare a road-map for transition into digital economy post- demonetization.
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