“I salute the people of India wholeheartedly for participating in this yagna against corruption, terrorism and black money,” he said. “The decision has several gains for farmers, traders, labourers who are the economic backbone of our nation.”
Modi also said the ban on Rs 500 and Rs 1,000 notes had given “a historic opportunity to embrace increased cashless payments and integrate latest technology in economic transactions”.
“Together we must ensure that India defeats black money. This will empower the poor, new middle class and benefit future generations,” Modi said.
Modi announced demonetisation on the night of November 8, saying it was meant to fight black money, corruption, fake currency and terror funding.
The opposition observed a “black day” on Thursday with a protest near Mahatma Gandhi’s statue inside the Parliament complex to mark one month of demonetisation.
Congress Vice President Rahul Gandhi said the currency spike was not a “bold but a foolish decision”. And the Paytm – an e-wallet service – meant “Pay To Modi”.
“It is an experiment conjured by the Prime Minister on individual basis, and every expert who had an opinion about this pushed aside and the Prime Minister took this so-called bold decision,” Gandhi said.
“But bold decisions can also be a foolish decision and this was a foolish decision, and it has devastated this country.”
CPI-M General Secretary Sitaram Yechury agreed, calling demonetisation a “man-made disaster” and saying it had only made the rich richer at the cost of the poor.
He said the government had failed to achieve its four stated objectives when it came up with the note ban.
“Each of these aims has proven to be wrong, both factually and by empirical evidence on ground,” Yechury said on Facebook.
He said demonetisation had brought the “economy to a halt in the last month” and said no section of the society had been left untouched from the turmoil, hardship and pain caused by the “Tughlaqi firman”.
He also accused the Modi government of writing off Rs 1.12 lakh crore of unreturned bank loans of corporates.
“The Modi government has made the rich richer, all at the cost of the poor and the middle class.”
West Bengal Chief Minister Mamata Banerjee too targeted Modi, saying that demonetisation had killed over 90 people.
“One month since demonetisation was announced. More than 90 lives lost. How many more Modi babu?” Banerjee tweeted.
The Trinamool Congress supremo tweeted a list of 90 names who she said had died while standing in bank or ATM queues or committed suicide due to lack of cash after the note ban.
Meanwhile, the Maharashtrawadi Gomantak Party (MGP), a BJP ally in Goa, said demonetisation had caused hardship to people.
“While the idea to weed out black money is good, the manner in which demonetisation has been implemented has put people in hardship,” said MGP President Deepak Dhavalikar.
Even after the 50-day deadline, the BJP would not like to revert to the pre-November 8 times of ‘cash transactions’, said a party spokesperson on Thursday.
The government is in favour of moving towards an economy where ‘cashless transactions’ outweigh the ‘cash transactions’, BJP National Spokesperson G.V.L. Narasimha Rao told a press conference at the party’s state headquarters here.
Talking of his party’s tough stance against black money, Rao said action against black money is being taken by the central government on multiple fronts, including cash, gold, landed property and foreign assets.
Several legislations, like the Black Money Act and the Benami Transactions (Prohibition) Act would be used to curb black money and corruption, he said.
“Unless we move towards a less-cash economy, from January 1 (2017), things will be back to the usual. We don’t want to return to that business-as-usual scenario of pre-November 8 days,” he stressed.
India’s cash-to-GDP ratio is 14 per cent, which is considered very high, he said, adding that in major economies it is not more than four per cent.
The BJP leader also said that a completely cashless economy is not a practical idea.
“There is no economy which is completely cashless. It is not practical.
“But that doesn’t mean that after December, all the cash will be back for us to do cash transactions,” he said and urged the general public to opt for cashless transactions over using cash.
Admitting that there are visible and hidden costs in reducing cash volume in the economy, the government on Thursday announced a series of eleven measures designed to increase the pace of digital payments to usher in a cashless economy.
Among the measures, payment by card for petrol and diesel will enjoy a discount of 0.75 per cent, Finance Minister Arun Jaitley told reporters in Delhi.
He said that in one month since the demonetisation of high value currency on November 8, the percentage of digital payments at petrol vends has gone up from 20 per cent to 40 per cent.
Customers will get a higher discount on digital payment as all central undertakings will ensure that the transaction fee and merchant discount rate (MDR) charges are waived on such payments, Jaitley said.
Suburban railway monthly and season tickets bought through digital payment will get a 0.5 per cent discount, effective from January 1, 2017, beginning with the Mumbai suburban railway network.
“Nearly 80 lakh passengers use seasonal or monthly ticket on suburban railways, largely in cash, spending nearly Rs 2,000 crore per year,” the minister said.
“As more and more passengers will shift to digital means the cash requirement may get reduced by Rs 1,000 crore per year in near future.”
The Finance Minister also announced a free accident insurance cover for passengers who buy railway tickets online.
“All passengers who buy ticket online will get free insurance cover worth Rs 10 lakh,” Jaitley said.
The minister elaborated that nearly 14 lakh railway passengers buy railway tickets daily — out of which 58 per cent tickets are bought online.
“It is expected that another 20% passengers may shift to digital payment methods of buying railway tickets. Hence, nearly 11 lakh passengers per day will be covered under the accidental insurance scheme,” he said.
The minister revealed that railways give a discount of five per cent for payment of services like catering, accommodation, retiring rooms through its affiliated entities, corporations to passengers.
Jaitley also announced that online payment for public sector insurance companies (life insurance and general insurance) will get 10 per cent discount for general insurance and 8 per cent discount for life insurance for new policies sold.
The public sector banks are advised to charge only Rs 100 per month as monthly rental from merchants for PoS (point of sale) terminals, micro ATMs, mobile POS to bring small merchants on board the digital payment eco-system, Jaitley said.
“Nearly 6.5 lakh machines by public sector banks have been issued to merchants who will be benefited by the lower rentals and promote digital transactions,” the minister said.
“With lower rentals, more merchants will install such machines and promote digital transactions.”
Besides, no service tax will be charged on digital transaction charges or MDR for transactions up to Rs 2,000 per transaction.
The minister informed that payments made for toll charges on the national highways using RFID (Radio-frequency identification) card or Fast Tags will entail a discount of 10 per cent for the year 2016-17.
In addition, the minister announced measures to promote digital payment infrastructure in rural areas.
“The central government through NABARD (National Bank for Agriculture and Rural Development) will extend financial support to eligible banks for deployment of 2 POS devices each in one lakh villages with population of less than 10,000,” the minister pointed out.
“These POS machines are intended to be deployed at primary cooperative societies, milk societies, agricultural input dealers to facilitate agri-related transactions through digital means.”
“This will benefit farmers of one lakh villages covering a total population of nearly 75 crore who will have facility to transact cashless in their villages for their agri needs.”
The central government through NABARD will also support ‘Rural Regional Banks’ and ‘Cooperative Banks’ to issue “Rupay Kisan Cards” to 4.32 crore ‘Kisan Credit Card’ holders to enable them to make digital transactions at POS machines, micro ATMs and ATMs. (IANS)
The post Short-term pain for long-term gain: Modi gung-ho on taking India from cashless to less cash appeared first on Current News.