In a move to promote use of the plastic money, the government has formed a committee to look at ways to dis-incentivise cash transactions, Finance Secretary Rajiv Mehrishi said on Monday.
Among the measures in consideration is making mandatory use of cards for paying bills in 5-star hotels.
"Several things are in considerations, for example incentivising banks ... you know there are transaction costs which government can perhaps share. But there are also otherwise, you know what I would say to disincentivise cash transaction, any expenditure by a person in a five star hotel above Rs 5,000 have to be settled using credit card, there can be also decisions like that," Mr Mehrishi said.
"The committee will look at what structures can be put in place to encourage use of credit or debit cards," Mr Mehrishi added.
The move comes days after Finance Minister Arun Jaitley in his maiden full-year Budget had said that the government will announce incentives to encourage card usage by consumers to curb black money flow into the system.
"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 dis-incentivise cash transactions," Mr Jaitley had said in his Budget speech.
Till January 31, over 11 crore RuPay cards have been used under Pradhan Mantri Jan Dhan Yojana.
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