In a bid to curb black money flow into the system, Finance Minister Jaitley said the Government will announce incentives to encourage card usage by consumers.

“One way to curb the flow of black money is to discourage transactions in cash. Now that a majority of Indians has or can have, a RuPay debit card, I, therefore, propose to introduce soon several measures that will incentivise credit or debit card transactions, and disincentivise cash transactions,” Jaitley said while presenting the Union Budget 2015.

With the advent of Prime Minister’s Jan Dhan Yojana scheme, over 11 crore Rupay cards have been issued as on January 31, 2015. This will definitely help banks to encourage customers to go digital with their transactions.

Further, it compliments the Reserve Bank of India’s efforts to make India into a cashless economy. The amount of cash floating in the system is estimated at about 18 per cent of the country’s gross domestic product, making India one of the most currency-dependent countries in the world.

The FM said that India has now embarked on two more game changing reforms which are GST (goods and services tax) and the JAM Trinity-Jan Dhan, Aadhar and Mobile-to implement direct transfer of benefits. He added that GST will put in place a state-of-the art indirect tax system by 1st April 2016 while the JAM Trinity will allow transfer benefits in a leakage-proof, well-targeted and cashless manner.

This will encourage more online and card-based transactions thereby also boosting the e-commerce segment.

Amrish Rau, MD, Citrus Pay said, “This welcome move by the FM will provide a boost to electronic payment transactions, online and also at POS (point of sale transactions). A similar approach helped Korea to move to almost 60 per cent cashless transactions in retail. This will help the GDP by almost 0.5 – 1 per cent over the next few years."

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