AP CMs panel wants e-sops to continue

​New Delhi: A high-level NITI Aayog Committee of Chief Ministers has favoured continuance of service tax exemptions on digital payments beyond December 31, in order to make India a less-cash economy.

"We want to recommend this (service tax exemptions) to government of India to continue not only beyond December 31, even beyond March 31, and for the future also.

If digital currency will be costlier than physical currency, then people will go to physical currency," said Andhra Pradesh Chief Minister Chandrababu Naidu, who is heading the Chief Ministers’ Committee on demonetisation.

Chandrababu Naidu, along with Amitabh Kant, CEO, NITI Aayog and Arvind Panagariya, vice-chairman of NITI Aayog, was speaking to reporters after the fourth meeting of Committee of Chief Ministers on demonetisation, which deliberated extensively with the members of the Committee and secretaries of all departments.

Explaining about the suggestion made on the biometric system, Chandrababu Naidu said that the proposal to link Aadhaar would ensure smooth switch over to digital economy.

The biometric system evolved by technology major, TCS, would enable a customer to transact his business in a simple manner using his Aadhaar identity along with his bank account details.

The Committee would be asking the RBI to rope in the services of all Rural Banks and Cooperative Banks too to reach out to the nook and corner of the country, Naidu said and added "plucking the low hanging fruits" by using the existing technology was the primary aim.

Two major breakthroughs using existing infrastructure -- Aadhaar Pay and modified versions of USSD (Unstructured Supplementary Service Data) and UPI (United Payment Interface) -- would be launched soon.

This apart, significant upgrades in technology have been made and new capacities created to enable millions of Indians use digital payments, Chandrababu Naidu said.

An app for UPI and interoperability of USSD and UPI has now been made possible which will be a major push for 600 million Indians to use digital payments.

The Andhra Pradesh Chief Minister also said that the Committee is working with NITI Aayog to address existing constraints in connectivity, hardware and technical infrastructure to push cashless transactions.

While 11.8 lakh POS machines (Point of Sale machines) were to be imported, 10 lakh biometric mobile devices would be released soon which could come with a subsidy of 50 per cent (Rs 1,000) to the trader, he said.
In addition, the Government would ensure that there was no hardware or bandwidth and backup operations problem.

Naidu said that the Committee of Chief Ministers will present its interim report on digital payments movement to Prime Minister Narendra Modi within a week.

"We are planning a sustainable, long-term, policy to attract a majority in India to move to digital payments through providing incentives...," Naidu said.

During the meeting, a presentation was also made on best practices and learnings from other countries for a digital economy in India.

When asked if he has changed his position on demonetisation of higher value currency notes, Naidu said, "We are going to have variable advantages... even today, there are some problems.

People are suffering today for the larger interest of the country. So, we have to appreciate that. Even in this crisis, people are standing for 4-5 hours in the queue, even now he says it is good for my future... there is a crisis, we have to handle crisis with utmost care. This is what I mean, this is what I stand (for)," Naidu said.