Govt must absorb transaction costs, says Economic Survey

Agreeing with financial technology companies, the Economic Survey 2016-17 said the government should absorb transaction costs to promote less-cash economy. It added that these costs should not be passed on to customers or financial intermediaries.

For long, financial companies, digital wallets, and payment gateways have been asking government for these measures as a way of promoting digital cash. "The cost attached to cash transaction is not visible as it is with digital. Therefore, it is not fair to attach the transaction costs to digital," said Naveen Surya, chairman of Payments Council of India and managing director of ItzCash.

Survey said that one intermediate objective of demonetisation is to create a less-cash or cash-light economy, as this is key to channelling more savings sent through the formal financial system and improving tax compliance. 

Currently, India is far from this objective, as according to the Ratan Watal committee, cash accounts for 78 per cent of all consumer payments. 

The government has taken a number of steps to facilitate digital economy.