Chief ministers panel to steer India's cashless push

New Delhi: The government has appointed a high-level panel to ready a blueprint for India’s transition to a less-cash economy in the next one year.

The decision seeks to capitalize on the momentum generated towards digital payments in the aftermath of demonetisation of high-value currency notes. At the same time, it reaffirms the government’s decision to steer the country towards a cashless economy.

Andhra Pradesh chief minister (CM) N. Chandrababu Naidu is convenor of the panel, which also includes five other CMs and Niti Aayog chief executive officer Amitabh Kant.

Experts such as Nandan Nilekani, the architect of Aadhaar, are special invitees.

The CMs represent a wide political spectrum, including the Congress, signalling the government’s intent to generate political consensus on the push to a cashless economy.

The other CMs on the panel are Naveen Patnaik of Odisha (Biju Janata Dal), V. Narayanasamy of Puducherry (Congress), Pawan Kumar Chamling of Sikkim (Sikkim Democratic Front) and Shivraj Singh Chouhan of Madhya Pradesh and Devendra Fadnavis of Maharashtra, both of whom belong to the Bharatiya Janata Party (BJP).

Sikkim Democratic Front is an ally of the BJP in the ruling National Democratic Alliance.

The panel will lay down a roadmap for rapid adoption of digital payment systems such as debit, credit and prepaid cards, digital wallets, Internet banking, Unified Payment Interface and banking apps.

It has also been asked to evolve a plan to effectively communicate the benefits of the digital economy to the public. In addition, it will prepare a strategy to facilitate adoption of digital payments by state departments as well.

Transactions through national electronic funds transfer, real-time gross settlement and immediate payment service have grown at a rapid pace in India. In 2015-16, such transactions were more than three times those cleared through cheques.

Besides aligning the Reserve Bank of India, the finance ministry and banks in the digital push, it is also important that states are brought on board, as many payments and reimbursements by state agencies are based on physical cash, said Naveen Surya, managing director of digital payments company ItzCash, and chairman of the Payments Council of India.

“Having different chief ministers in the loop and trying to understand the concerns of the states is a great move. The support from each state government becomes crucial while trying to digitize the payment system,” he added.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.