The committee on digital payments, led by Andhra Pradesh Chief Minister N Chandrababu Naidu, expects to submit its final report to the government soon.
The panel has already submitted an interim report to the Centre and is further studying best practices on transition to cashless transactions, Naidu told Bloomberg in an interview. The committee was constituted after the Union government's decision to withdraw high-value currency notes, which resulted in a cash shortage in the economy.
Calling the imminent rollout of the Goods and Services Tax a “consensus-backed decision”, Naidu reiterated that the new tax regime will simplify procedures and improve tax collections.
Here are edited excerpts from the conversation.
What recommendation will the panel put forward to ensure a smooth transition towards a cashless society in India?
After demonetisation, PrimeMinister Modi promoted a cashless society, all transactions will be cashless. I am theconvener for the subcommittee constituted by the Government of India which includes five chief ministers. We have given aninterim report. Now we are further studying the best practices available all overthe world. We want to give the final report to the government. India is very strong in information technology. Out ofevery four, one is an Indian. And within that, my state (Andhra Pradesh) dominates.
What constraint are you facing? There must be difficulties given constraints in infrastructure, skills and in financial literacy?
On literacy we have very good advantage, given India's young population. At the same time, physical infrastructure, bandwidth etc. we have to improve further. Apart from that, we have to give correct incentives for cashless transactions. Then automatically it will pick up, and everybody will come online.
Do you think India will be able to ensure a smooth transition towards the Goods and Services Tax?
This is one of the important financial reforms in the country after economic reforms. All political parties and state governments supported this move. This is a consensus-backed decision. This decision has an excellent advantage – procedures will be simplified, tax collection will be improved, and also we can eradication corruption to the maximum extent. All state governments are in concurrence with the federal government, and will be implemented from July 1.
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