India's free UPI payment ecosystem could soon witness its biggest policy shift since launch. The government has proposed amendments to the Payment and Settlement Systems Act that create a legal framework for introducing Merchant Discount Rate (MDR) on selected digital payment modes in the future.

While no immediate charges have been announced, reports suggest the government is considering a 0.25% to 0.4% merchant fee on UPI transactions above ₹2,000 made to businesses. Person-to-person transfers are expected to remain free, while larger merchants could bear the charges based on their annual turnover.

UPI Payments May No Longer Be Free? Government Eyes Merchant Charges

The launch of Card Soundbox, was announced on Monday by One97 Communications Limited (OCL), the company that controls the Paytm brand, Mint reported. According to a statement from the company, its recognisable Soundbox with “tap and pay” enables retailers to accept both mobile and card payments across all Visa, Mastercard, American Express, and RuPay networks, enabling them to grow their businesses.

With Paytm Card Soundbox, the business helps retailers with two issues: taking card payments and receiving immediate audio alerts for all payments. By fusing Soundbox with NFC (near field communication) or contactless debit and credit card payments with mobile payments, the launch of Paytm’s innovative device will revolutionise in-store transactions and increase merchant payment acceptance.

The new Soundbox, a first for the industry, gives both: the merchant and the consumer audible and visual payment confirmation via an LCD display. Merchants can take card payments up to Rs 5,000 ($60) using the built-in “tap and pay” feature of the Paytm Card Soundbox. The Made in India device uses a 4G network to provide the quickest payment alerts.

Paytm Card Soundbox improves payment alert clarity with a 4W speaker. Five days is the length of the battery life. The gadget gives warnings in 11 languages that may be modified by the retailer through the Paytm for Business app, which was created with the goal of catering to a broad merchant base. Additionally, Paytm Card Soundbox allows users of smartphones with NFC capabilities to use the tap feature to pay using their devices.

“Paytm has always been at the forefront of innovating for India’s small businesses, solving their payment and financial services problems,” Mint quoted Vijay Shekhar Sharma, founder and CEO of Paytm. According to him, the introduction of Card Soundbox will significantly help merchants meet their two needs for mobile payments and card payments.

According to Gautam Aggarwal, Division President of South Asia at Mastercard, “The Paytm Card Soundbox is yet another innovation that will enable small merchants to provide a seamless digital payment experience to their customers by easily accepting contactless card payments.”

Mint also quoted NPCI (National Payments Corporation of India) said, “Paytm Card Soundbox is India’s first Soundbox that will also accept contactless card payments and would further accelerate cashless transactions in the country.”

&nbsp;

WATCH WION LIVE HERE

<iframe allow="accelerometer; autoplay; encrypted-media; gyroscope; picture-in-picture" allowfullscreen="" frameborder="0" height="350" src="https://www.wionews.com/live-tv/embed?autoplay=1&amp;mute=1" width="100%"></iframe>

The launch of Card Soundbox, was announced on Monday by One97 Communications Limited (OCL), the company that controls the Paytm brand, Mint reported. According to a statement from the company, its recognisable Soundbox with “tap and pay” enables retailers to accept both mobile and card payments across all Visa, Mastercard, American Express, and RuPay networks, enabling them to grow their businesses.

The launch of Card Soundbox, was announced on Monday by One97 Communications Limited (OCL), the company that controls the Paytm brand, Mint reported. According to a statement from the company, its recognisable Soundbox with “tap and pay” enables retailers to accept both mobile and card payments across all Visa, Mastercard, American Express, and RuPay networks, enabling them to grow their businesses. With Paytm Card Soundbox, the business helps retailers with two issues: taking card payments and receiving immediate audio alerts for all payments. By fusing Soundbox with NFC (near field communication) or contactless debit and credit card payments with mobile payments, the launch of Paytm’s innovative device will revolutionise in-store transactions and increase merchant payment acceptance. The new Soundbox, a first for the industry, gives both: the merchant and the consumer audible and visual payment confirmation via an LCD display. Merchants can take card payments up to Rs 5,000 ($60) using the built-in “tap and pay” feature of the Paytm Card Soundbox. The Made in India device uses a 4G network to provide the quickest payment alerts. Paytm Card Soundbox improves payment alert clarity with a 4W speaker. Five days is the length of the battery life. The gadget gives warnings in 11 languages that may be modified by the retailer through the Paytm for Business app, which was created with the goal of catering to a broad merchant base. Additionally, Paytm Card Soundbox allows users of smartphones with NFC capabilities to use the tap feature to pay using their devices. “Paytm has always been at the forefront of innovating for India’s small businesses, solving their payment and financial services problems,” Mint quoted Vijay Shekhar Sharma, founder and CEO of Paytm. According to him, the introduction of Card Soundbox will significantly help merchants meet their two needs for mobile payments and card payments. According to Gautam Aggarwal, Division President of South Asia at Mastercard, “The Paytm Card Soundbox is yet another innovation that will enable small merchants to provide a seamless digital payment experience to their customers by easily accepting contactless card payments.” Mint also quoted NPCI (National Payments Corporation of India) said, “Paytm Card Soundbox is India’s first Soundbox that will also accept contactless card payments and would further accelerate cashless transactions in the country.” WATCH WION LIVE HERE

Paytm’s newly launched “Card Soundbox,” enables credit, debit card payments

India's digital payments landscape is on the brink of a historic revolution, thanks to the Unified Payments Interface (UPI) system. A recent report by PwC India, titled "The Indian Payments Handbook – 2022-27", has projected that&nbsp;UPI will achieve a groundbreaking milestone of 1 billion daily transactions by 2026-27.&nbsp;

During the period of 2022-23, UPI accounted for 75 percent of the total transaction volume, signifying a massive shift towards digital payments. In the next five years, UPI is projected to strengthen its grip on the retail digital payments landscape and reach an astounding 90 percent of the total transaction volume.

India's Evolving Payment Habits

The exponential growth of UPI transactions paints a vivid picture of the nation's evolving payment habits. With a compounded annual growth rate (CAGR) of 50 percent, the total number of online transactions is projected to surge from 103 billion in FY 2022-23 to 411 billion in FY 2026-27. UPI transactions, in particular,&nbsp;are expected to experience a substantial rise from 83.71 billion in 2022-23 to a staggering 379 billion transactions by 2026-27.

While UPI takes the lead, the report also highlights the significance of credit cards in India's digital payments landscape. The credit card segment continues to experience robust growth, challenging the traditional dominance of debit cards. According to the report, credit card transactions are projected to surpass debit card transactions by FY 2024-2025, marking a significant turning point. This shift can be attributed to the convenience and versatility offered by credit cards, making them increasingly favored by consumers. Over the next five years, credit card issuance is expected to record&nbsp;a CAGR of 21 percent.

The report emphasises that the payments industry will focus on expanding the ecosystem and developing new use cases for existing payment platforms in the coming years. Areas such as embedded and ecosystem finance, digital lending based on payment transactions, and offline payments are predicted to drive the next phase of growth in the payments industry.&nbsp;

History of the UPI Revolution

UPI, launched in 2016 by the National Payments Corporation of India (NPCI), was introduced as a real-time payment system that aimed to simplify peer-to-peer transactions and facilitate seamless digital payments. While it faced skepticism and doubts about its potential to disrupt India's predominantly cash-based economy in its early stages, its user-friendly interface and interoperability across various banks and payment apps soon won the hearts of millions of Indians.

UPI's growth can be attributed to several key factors that contributed to its success&nbsp;

Firstly, the government's push for digitalization through initiatives like demonetization in 2016 created a favorable environment for UPI to thrive. The sudden scarcity of physical cash led to a surge in digital transactions, with UPI offering a convenient and secure alternative to cash payments.

Secondly, UPI's open architecture allows seamless integration with various payment service providers and banking apps, enabling users to link their bank accounts directly and initiate transactions effortlessly. This interoperability eliminated the need for multiple payment apps, making UPI an attractive choice for consumers and businesses.

Furthermore, UPI's innovative features, such as Virtual Payment Addresses (VPAs) and QR code scanning, revolutionized&nbsp;transactions. VPAs eliminated the need for sharing bank account details, providing a safer and more user-friendly experience. QR codes enabled quick, contactless payments, bridging the gap between online and offline transactions.

(Inputs from various news agencies)

India's digital payments landscape is on the brink of a historic revolution, thanks to the Unified Payments Interface (UPI) system. A recent report by PwC India, titled "The Indian Payments Handbook – 2022-27", has projected that UPI will achieve a groundbreaking milestone of 1 billion daily transactions by 2026-27.

India's digital payments landscape is on the brink of a historic revolution, thanks to the Unified Payments Interface (UPI) system. A recent report by PwC India, titled "The Indian Payments Handbook – 2022-27", has projected that UPI will achieve a groundbreaking milestone of 1 billion daily transactions by 2026-27. During the period of 2022-23, UPI accounted for 75 percent of the total transaction volume, signifying a massive shift towards digital payments. In the next five years, UPI is projected to strengthen its grip on the retail digital payments landscape and reach an astounding 90 percent of the total transaction volume. India's Evolving Payment Habits The exponential growth of UPI transactions paints a vivid picture of the nation's evolving payment habits. With a compounded annual growth rate (CAGR) of 50 percent, the total number of online transactions is projected to surge from 103 billion in FY 2022-23 to 411 billion in FY 2026-27. UPI transactions, in particular, are expected to experience a substantial rise from 83.71 billion in 2022-23 to a staggering 379 billion transactions by 2026-27. While UPI takes the lead, the report also highlights the significance of credit cards in India's digital payments landscape. The credit card segment continues to experience robust growth, challenging the traditional dominance of debit cards. According to the report, credit card transactions are projected to surpass debit card transactions by FY 2024-2025, marking a significant turning point. This shift can be attributed to the convenience and versatility offered by credit cards, making them increasingly favored by consumers. Over the next five years, credit card issuance is expected to record a CAGR of 21 percent. The report emphasises that the payments industry will focus on expanding the ecosystem and developing new use cases for existing payment platforms in the coming years. Areas such as embedded and ecosystem finance, digital lending based on payment transactions, and offline payments are predicted to drive the next phase of growth in the payments industry. History of the UPI Revolution UPI, launched in 2016 by the National Payments Corporation of India (NPCI), was introduced as a real-time payment system that aimed to simplify peer-to-peer transactions and facilitate seamless digital payments. While it faced skepticism and doubts about its potential to disrupt India's predominantly cash-based economy in its early stages, its user-friendly interface and interoperability across various banks and payment apps soon won the hearts of millions of Indians. UPI's growth can be attributed to several key factors that contributed to its success Firstly, the government's push for digitalization through initiatives like demonetization in 2016 created a favorable environment for UPI to thrive. The sudden scarcity of physical cash led to a surge in digital transactions, with UPI offering a convenient and secure alternative to cash payments. Secondly, UPI's open architecture allows seamless integration with various payment service providers and banking apps, enabling users to link their bank accounts directly and initiate transactions effortlessly. This interoperability eliminated the need for multiple payment apps, making UPI an attractive choice for consumers and businesses. Furthermore, UPI's innovative features, such as Virtual Payment Addresses (VPAs) and QR code scanning, revolutionized transactions. VPAs eliminated the need for sharing bank account details, providing a safer and more user-friendly experience. QR codes enabled quick, contactless payments, bridging the gap between online and offline transactions. (Inputs from various news agencies)

India's UPI set to record 1 billion daily transactions by 2026-27: Report

Britain's&nbsp;regulator&nbsp;for payment systems said it was&nbsp;concerned that&nbsp;Barclays&nbsp;has pulled out of an agreement that allows customers of banks to withdraw cash&nbsp;from&nbsp;post&nbsp;offices&nbsp;for free.

Lawmakers have piled pressure on banks to maintain their free-to-use cash machine network as fewer people use branches and opt to bank online and pay for purchases by card.

Post&nbsp;offices&nbsp;have sought to plug gaps created by banks closing cash machines in rural areas in particular. Last year, Britain's 11,500&nbsp;Post&nbsp;Office branches handled more than 130 million transactions for UK banks.

"This step by&nbsp;Barclays&nbsp;reduces the number of places their customers can go to get cash," the Payment Systems&nbsp;Regulator&nbsp;(PSR) said in a statement on Tuesday.

"We are&nbsp;concerned about the impact this will have, and we will be closely monitoring the steps&nbsp;Barclays&nbsp;plan to take to make sure there are suitable alternatives for its customers to access their cash - especially those who rely on cash or who live in rural areas."

Barclays&nbsp;said cash&nbsp;withdrawals at&nbsp;post&nbsp;office counters will end in January but it has increased funding for the&nbsp;Post&nbsp;Office so customers and businesses can still pay in cash, cheques and check balances.

Barclays&nbsp;said it would not close branches in remote areas, or where it is the last bank in town, for the next two years.

The PSR said it welcomed news&nbsp;from&nbsp;the&nbsp;Post&nbsp;Office on Tuesday that the rest of Britain's banks will continue to offer full banking services to their customers through&nbsp;post&nbsp;offices.

Britain's largest cash machine (ATM) network that allows banks to offer customers access to cash is operated by LINK.

The&nbsp;regulator&nbsp;said it may use its powers to ensure that LINK's public commitments regarding the use of&nbsp;post&nbsp;offices&nbsp;and the availability of free-to-use cash machines are being met.

Consumer campaign group which&nbsp;said last month that poorer areas were the worst affected by the loss of free-to-use cash machines.

One in 10 of Britain's free-to-use cash machines either closed or started charging a fee over the past 17 months, while more than a third of bank branches have shut within the past five years, Which? said.

Britain's regulator for payment systems said it was concerned that Barclays has pulled out of an agreement that allows customers of banks to withdraw cash from post offices for free.

Britain's regulator for payment systems said it was concerned that Barclays has pulled out of an agreement that allows customers of banks to withdraw cash from post offices for free. Lawmakers have piled pressure on banks to maintain their free-to-use cash machine network as fewer people use branches and opt to bank online and pay for purchases by card. Post offices have sought to plug gaps created by banks closing cash machines in rural areas in particular. Last year, Britain's 11,500 Post Office branches handled more than 130 million transactions for UK banks. "This step by Barclays reduces the number of places their customers can go to get cash," the Payment Systems Regulator (PSR) said in a statement on Tuesday. "We are concerned about the impact this will have, and we will be closely monitoring the steps Barclays plan to take to make sure there are suitable alternatives for its customers to access their cash - especially those who rely on cash or who live in rural areas." Barclays said cash withdrawals at post office counters will end in January but it has increased funding for the Post Office so customers and businesses can still pay in cash, cheques and check balances. Barclays said it would not close branches in remote areas, or where it is the last bank in town, for the next two years. The PSR said it welcomed news from the Post Office on Tuesday that the rest of Britain's banks will continue to offer full banking services to their customers through post offices. Britain's largest cash machine (ATM) network that allows banks to offer customers access to cash is operated by LINK. The regulator said it may use its powers to ensure that LINK's public commitments regarding the use of post offices and the availability of free-to-use cash machines are being met. Consumer campaign group which said last month that poorer areas were the worst affected by the loss of free-to-use cash machines. One in 10 of Britain's free-to-use cash machines either closed or started charging a fee over the past 17 months, while more than a third of bank branches have shut within the past five years, Which? said.

Barclays withdrawal from post offices a concern: Regulator

There has been an interesting twist in the world of cryptocurrencies. While India is linking the concept of Bitcoin to a Ponzi scheme and is dismissing the idea of making it legal, many countries, on the other hand, have been aggressively working on issuing their own virtual currencies. Interestingly, a couple of them have already released state-backed digital tokens.&nbsp;

Cryptocurrencies, such as Bitcoin and Ethereum have gained momentum in the last few months.

And it&rsquo;s not just private players which are backing this new-age currency. In fact, governments across the globe have also started to consider releasing their own cryptocurrencies.&nbsp;

Countries such as China, Estonia, and Iran have already floated ideas for their own digital currency.

&nbsp;Venezuela has gone ahead and released the world&rsquo;s first sovereign cryptocurrency - the Petro. The oil-backed digital token raised about 735 million us dollars on the first day of its pre-sale earlier this month. The country is now preparing for a new cryptocurrency called &quot;petro gold&quot; that will be backed by precious metals.

Apart from Venezuela, the Marshall Islands are also going to issue a cryptocurrency that will be circulated as legal tender. The new currency will be called SOV and it will act like regular money.&nbsp;

Its legal tender status has been approved by the country&rsquo;s parliament. It&rsquo;s interesting to note that the country has capped the SOV supply at 24 million tokens in order to prevent inflation.

While some countries are in the process of issuing digital currencies, others are still working on regulations to govern them. For instance, Switzerland has started to treat some digital currencies as securities under regulatory guidelines. &nbsp;

Singapore&#39;s central bank is assessing whether additional regulations are required to protect investors in cryptocurrencies. Other countries like South Korea, where trading in cryptocurrencies is more popular, are also looking at more efficient ways to regulate them.

But India has taken a different path. The country is planning to bar cryptocurrencies from its payments system. India&#39;s finance ministry has already cautioned investors about the risks of trading in cryptocurrencies. While many countries are embracing cryptocurrencies, there is still speculation whether it can transform economies into cashless societies. &nbsp;

&nbsp;

The article was written with inputs from Reuters.

&nbsp;

(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)&nbsp;

While many countries are embracing cryptocurrencies, India's finance ministry has cautioned investors about the risks of trading in cryptocurrencies

There has been an interesting twist in the world of cryptocurrencies. While India is linking the concept of Bitcoin to a Ponzi scheme and is dismissing the idea of making it legal, many countries, on the other hand, have been aggressively working on issuing their own virtual currencies. Interestingly, a couple of them have already released state-backed digital tokens. Cryptocurrencies, such as Bitcoin and Ethereum have gained momentum in the last few months. And it’s not just private players which are backing this new-age currency. In fact, governments across the globe have also started to consider releasing their own cryptocurrencies. Countries such as China, Estonia, and Iran have already floated ideas for their own digital currency. Venezuela has gone ahead and released the world’s first sovereign cryptocurrency - the Petro. The oil-backed digital token raised about 735 million us dollars on the first day of its pre-sale earlier this month. The country is now preparing for a new cryptocurrency called "petro gold" that will be backed by precious metals. Apart from Venezuela, the Marshall Islands are also going to issue a cryptocurrency that will be circulated as legal tender. The new currency will be called SOV and it will act like regular money. Its legal tender status has been approved by the country’s parliament. It’s interesting to note that the country has capped the SOV supply at 24 million tokens in order to prevent inflation. While some countries are in the process of issuing digital currencies, others are still working on regulations to govern them. For instance, Switzerland has started to treat some digital currencies as securities under regulatory guidelines. Singapore's central bank is assessing whether additional regulations are required to protect investors in cryptocurrencies. Other countries like South Korea, where trading in cryptocurrencies is more popular, are also looking at more efficient ways to regulate them. But India has taken a different path. The country is planning to bar cryptocurrencies from its payments system. India's finance ministry has already cautioned investors about the risks of trading in cryptocurrencies. While many countries are embracing cryptocurrencies, there is still speculation whether it can transform economies into cashless societies. The article was written with inputs from Reuters. (Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)

Opinion: While the world plans to embrace cryptocurrencies, India is suspicious

&ldquo;Organised loot and a legalised plunder&rdquo; is how Dr Manmohan Singh describes &lsquo;demonetisation&rsquo;. In Ahmedabad, on Tuesday, our former prime minister said: &ldquo;November 8 was a black day for our economy and, indeed, our democracy,&rdquo; referring to this day last year when the government announced its move to demonetise Rs 500 and Rs 1,000 notes.&nbsp;

&ldquo;To promote a less cash economy, coercive steps like demonetisation are ineffective. Nowhere in the world has any nation taken such a drastic step that swept off 86% of the currency in circulations,&rdquo; he said.

Our Finance Minister Arun Jaitley says demonetisation was a &lsquo;watershed moment&rsquo; in Indian history. Hitting out at detractors, and perhaps especially miffed at his illustrious predecessor&rsquo;s comments, Jaitley said: &ldquo;An anti-black money drive is a moral step, loot is what happened in 2G, in Commonwealth Games 2010 and in coal block allocation.&rdquo;

<div class="ui-state-default" contenteditable="false">
<div class="twitter-block" draggable="false">
<blockquote class="twitter-tweet" data-conversation="none" data-lang="en">
Reducing the amount of cash in the economy won&#39;t end corruption but definitely make it difficult: <a href="https://twitter.com/arunjaitley?ref_src=twsrc%5Etfw">@arunjaitley</a> defends <a href="https://twitter.com/hashtag/demonitization?src=hash&amp;ref_src=twsrc%5Etfw">#demonitization</a>
&mdash; prasad sanyal (@prasadsanyal) <a href="https://twitter.com/prasadsanyal/status/927840191284371456?ref_src=twsrc%5Etfw">November 7, 2017</a></blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script></div>
<a class="close-mark close-div" href="#" id="jqclosemark">&times;</a></div>

&nbsp;

While it may be politically expedient to brush off Dr Manmohan Singh and highlight the graft cases when he was the prime minister from 2004 to 2014, it must be conceded that Dr Singh does know a thing or two about the Indian economy. He does have a Tripos from Cambridge and a DPhil from Oxford in Economics. Besides, he has been a Governor of the Reserve Bank of India, headed the Planning Commission in its heydays in the 1980s and, as finance minister between 1991 and 1996, was the harbinger of economic liberalisation in India. &nbsp;

In a series of tweets and graphic templates, Prime Minister Modi has defended the move saying, it has resulted in the &lsquo;highest ever unearthing of black money and dealt a decisive blow to Naxalism and terrorism.&rsquo;

<div class="ui-state-default" contenteditable="false">
<div class="twitter-block" draggable="false">
<blockquote class="twitter-tweet" data-lang="en">
Giving strong impetus to the fight against black money. <a href="https://t.co/4fvbC31VAW">https://t.co/4fvbC31VAW</a> 
 
via NMApp <a href="https://t.co/G0TMkBrX19">pic.twitter.com/G0TMkBrX19</a>
&mdash; PMO India (@PMOIndia) <a href="https://twitter.com/PMOIndia/status/927812625043398656?ref_src=twsrc%5Etfw">November 7, 2017</a></blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script></div>
<a class="close-mark close-div" href="#" id="jqclosemark">&times;</a></div>

<div class="ui-state-default" contenteditable="false">
<div class="twitter-block" draggable="false">
<blockquote class="twitter-tweet" data-lang="en">
Highest ever unearthing of black money<a href="https://t.co/4fvbC31VAW">https://t.co/4fvbC31VAW</a> 
 
via NMApp <a href="https://t.co/jmrJRPVHSL">pic.twitter.com/jmrJRPVHSL</a>
&mdash; PMO India (@PMOIndia) <a href="https://twitter.com/PMOIndia/status/927812417203068928?ref_src=twsrc%5Etfw">November 7, 2017</a></blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script></div>
<a class="close-mark close-div" href="#" id="jqclosemark">&times;</a></div>

The verdict is still out on the impact of this move on the Indian economy, and as with other &lsquo;watershed&rsquo; moments in recent Indian history, it has left public opinion deeply divided.

In a society ridden with inequality and poverty, where the &lsquo;aam aadmi&rsquo; is faced with corruption to get even basic amenities, economics doesn&rsquo;t wash. The promise of nabbing those with black money does, and little wonder then, that the move was received positively - as a decisive measure that will rid India of corruption.&nbsp;

The Opposition parties will observe the one-year mark of demonetisation on Wednesday as a &ldquo;Black Day&rdquo;. The Bharatiya Janata Party will commemorate the anniversary as &ldquo;Anti-Black Money Day&rdquo;. &nbsp;

The government has so far been able to pitch demonetisation as a move that was pro-poor and anti-rich, but as the economy shows signs of distress will Robin Hood and his merry band of men be able to assuage the &lsquo;aam aadmi&rsquo;?&nbsp;

As the Finance Minister pointed out today, there has been a shrinking of the informal sector, a wider tax base and greater digitisation in the economy. The government has been on point with its message and there are definite merits to these arguments.&nbsp;

<div class="ui-state-default" contenteditable="false">
<div class="twitter-block" draggable="false">
<blockquote class="twitter-tweet" data-lang="en">
Multi-dimensional success of Demonetisation. <a href="https://t.co/4fvbC31VAW">https://t.co/4fvbC31VAW</a> 
 
via NMApp <a href="https://t.co/l3qbArBcFy">pic.twitter.com/l3qbArBcFy</a>
&mdash; PMO India (@PMOIndia) <a href="https://twitter.com/PMOIndia/status/927812281378816000?ref_src=twsrc%5Etfw">November 7, 2017</a></blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script></div>
<a class="close-mark close-div" href="#" id="jqclosemark">&times;</a></div>

Though viewed as a bold and landmark move by the masses, a former Finance Minister of India from the Prime Minister&rsquo;s own BJP, Yashwant Sinha has criticised the move. As businessmen and traders start accounting for the full brunt of the impact of demonitisation, many believe it may not be the best way to tackle corruption.

In August this year, the Reserve Bank of India reported Indians returned almost all of the estimated Rs 15.4 lakh crore ($242 billion) in high-currency bills removed from circulation. It implies that a very small amount of unaccounted for money was held in cash.&nbsp;

While there has been a lot of hullabaloo over different government agencies sharing different sets of numbers, the total value of non-cash transactions rose by around 19 per cent between November 2016 and August 2017. The value and volume of mobile-based transactions recorded negative growth rates between November 2016 and August 2017.

All available evidence suggests that cash has returned to daily transactions and demonetisation may not have had the desired effect, at least in the short-term.&nbsp;

&nbsp;

&nbsp;

All available evidence suggests that cash has returned to daily transactions and demonetisation may not have had the desired effect, at least in the short-term.?

“Organised loot and a legalised plunder” is how Dr Manmohan Singh describes ‘demonetisation’. In Ahmedabad, on Tuesday, our former prime minister said: “November 8 was a black day for our economy and, indeed, our democracy,” referring to this day last year when the government announced its move to demonetise Rs 500 and Rs 1,000 notes. “To promote a less cash economy, coercive steps like demonetisation are ineffective. Nowhere in the world has any nation taken such a drastic step that swept off 86% of the currency in circulations,” he said. Our Finance Minister Arun Jaitley says demonetisation was a ‘watershed moment’ in Indian history. Hitting out at detractors, and perhaps especially miffed at his illustrious predecessor’s comments, Jaitley said: “An anti-black money drive is a moral step, loot is what happened in 2G, in Commonwealth Games 2010 and in coal block allocation.” Reducing the amount of cash in the economy won't end corruption but definitely make it difficult: @arunjaitley defends #demonitization — prasad sanyal (@prasadsanyal) November 7, 2017 × While it may be politically expedient to brush off Dr Manmohan Singh and highlight the graft cases when he was the prime minister from 2004 to 2014, it must be conceded that Dr Singh does know a thing or two about the Indian economy. He does have a Tripos from Cambridge and a DPhil from Oxford in Economics. Besides, he has been a Governor of the Reserve Bank of India, headed the Planning Commission in its heydays in the 1980s and, as finance minister between 1991 and 1996, was the harbinger of economic liberalisation in India. In a series of tweets and graphic templates, Prime Minister Modi has defended the move saying, it has resulted in the ‘highest ever unearthing of black money and dealt a decisive blow to Naxalism and terrorism.’ Giving strong impetus to the fight against black money. https://t.co/4fvbC31VAW via NMApp pic.twitter.com/G0TMkBrX19 — PMO India (@PMOIndia) November 7, 2017 × Highest ever unearthing of black moneyhttps://t.co/4fvbC31VAW via NMApp pic.twitter.com/jmrJRPVHSL — PMO India (@PMOIndia) November 7, 2017 × The verdict is still out on the impact of this move on the Indian economy, and as with other ‘watershed’ moments in recent Indian history, it has left public opinion deeply divided. In a society ridden with inequality and poverty, where the ‘aam aadmi’ is faced with corruption to get even basic amenities, economics doesn’t wash. The promise of nabbing those with black money does, and little wonder then, that the move was received positively - as a decisive measure that will rid India of corruption. The Opposition parties will observe the one-year mark of demonetisation on Wednesday as a “Black Day”. The Bharatiya Janata Party will commemorate the anniversary as “Anti-Black Money Day”. The government has so far been able to pitch demonetisation as a move that was pro-poor and anti-rich, but as the economy shows signs of distress will Robin Hood and his merry band of men be able to assuage the ‘aam aadmi’? As the Finance Minister pointed out today, there has been a shrinking of the informal sector, a wider tax base and greater digitisation in the economy. The government has been on point with its message and there are definite merits to these arguments. Multi-dimensional success of Demonetisation. https://t.co/4fvbC31VAW via NMApp pic.twitter.com/l3qbArBcFy — PMO India (@PMOIndia) November 7, 2017 × Though viewed as a bold and landmark move by the masses, a former Finance Minister of India from the Prime Minister’s own BJP, Yashwant Sinha has criticised the move. As businessmen and traders start accounting for the full brunt of the impact of demonitisation, many believe it may not be the best way to tackle corruption. In August this year, the Reserve Bank of India reported Indians returned almost all of the estimated Rs 15.4 lakh crore ($242 billion) in high-currency bills removed from circulation. It implies that a very small amount of unaccounted for money was held in cash. While there has been a lot of hullabaloo over different government agencies sharing different sets of numbers, the total value of non-cash transactions rose by around 19 per cent between November 2016 and August 2017. The value and volume of mobile-based transactions recorded negative growth rates between November 2016 and August 2017. All available evidence suggests that cash has returned to daily transactions and demonetisation may not have had the desired effect, at least in the short-term.

#Demonetisation: Indian economy watershed or waterboarded?

India&#39;s ruling Bharatiya Janata Party on Saturday termed demonetisation as a &quot;sacred movement&quot; that was supported by the masses and said that the deposition of black money will lead to &quot;bigger and cleaner GDP&quot;.

The economic resolution passed at the party&#39;s national executive meeting accused the opposition of trying to discredit the government by criticising the move that was aimed at the &quot;poor&#39;s welfare&quot;.

&quot;In this sacred movement across the country, the common people were taking upon themselves the temporary suffering of standing in queues with full enthusiasm and positive energy, but the Opposition had become negative with destructive energy to defame the central government and trying to destroy the positive environment of the country,&quot; the resolution said.

India&#39;s finance minister Arun Jaitley asserted that black money has been returned to the banks because of the currency reform and will lead to development.

&quot;Black money has been deposited in the banks. It has lost its anonymity. The informal economy will now increasingly integrate with the formal economy. This will lead to higher revenues with the States and the Centre. It will lead to the bigger and the cleaner GDP,&quot; the resolution said.

Jaitley also claimed that state revenues had not suffered, citing figures, and in states of Uttar Pradesh and Madhya Pradesh numbers had even increased.

The resolution said demonetisation was necessary for decimating the parallel economy of black money and for the smooth functioning of the GST in near future.

BJP supported Prime Minister Narendra Modi&#39;s decision at the meeting. BJP&#39;s &#39;Kisan Morcha&#39; (farmer wing of BJP) chief Virendra Singh Mast claimed that wasteful expenditure by farmers was reduced due to demonetisation. The opposition claims that farmers have suffered the most due to cash crunch.

Union minister Nirmala Sitharaman termed the decision as &quot;bold and historic decision&quot;.

&quot;The Rs 500 and Rs 1000 notes hidden in mattresses, something people would say symbolically, is now in bank accounts. It will help development,&quot; she said.

The ruling party claimed positive reaction towards demonetisation, quoting surveys. 
&quot;This is reflected in the fact that even after 50 days, there was not a single major incident in the country. There was no loss of public property and there was no loss of people&#39;s patience anywhere in the country.&quot;

BJP dismissed allegations that demonetisation was an abrupt decision, claiming that the resolution was taken with full-fledged preparations.&nbsp;

Listing the government&#39;s efforts to curb black money leading to demonetization, the resolution cited constitution of a SIT, introduction of Income Declaration Scheme, Jan Dhan Scheme, Black Money Act, Bankruptcy Insolvency Law, DRT Amendment Law and Benami Property Act, Press trust of India reported.

The party named various efforts by the government to promote a cashless, corruption free India through UPI, USSD, AEPS and Rupay Card.

&quot;The BJP firmly believes that digital economy will stop the leakage of taxes. This Government has ended any role of middlemen from its beneficiary schemes like MNREGA, financial assistance to poor students, subsidies to marginal sections including SC/ST/OBC through digital transactions and Direct Benefit Transfers,&quot; the resolution said.

(WION with inputs from PTI)

Wasteful expenditure by farmers was reduced due to demonetisation, says party's farmer wing chief

India's ruling Bharatiya Janata Party on Saturday termed demonetisation as a "sacred movement" that was supported by the masses and said that the deposition of black money will lead to "bigger and cleaner GDP". The economic resolution passed at the party's national executive meeting accused the opposition of trying to discredit the government by criticising the move that was aimed at the "poor's welfare". "In this sacred movement across the country, the common people were taking upon themselves the temporary suffering of standing in queues with full enthusiasm and positive energy, but the Opposition had become negative with destructive energy to defame the central government and trying to destroy the positive environment of the country," the resolution said. India's finance minister Arun Jaitley asserted that black money has been returned to the banks because of the currency reform and will lead to development. "Black money has been deposited in the banks. It has lost its anonymity. The informal economy will now increasingly integrate with the formal economy. This will lead to higher revenues with the States and the Centre. It will lead to the bigger and the cleaner GDP," the resolution said. Jaitley also claimed that state revenues had not suffered, citing figures, and in states of Uttar Pradesh and Madhya Pradesh numbers had even increased. The resolution said demonetisation was necessary for decimating the parallel economy of black money and for the smooth functioning of the GST in near future. BJP supported Prime Minister Narendra Modi's decision at the meeting. BJP's 'Kisan Morcha' (farmer wing of BJP) chief Virendra Singh Mast claimed that wasteful expenditure by farmers was reduced due to demonetisation. The opposition claims that farmers have suffered the most due to cash crunch. Union minister Nirmala Sitharaman termed the decision as "bold and historic decision". "The Rs 500 and Rs 1000 notes hidden in mattresses, something people would say symbolically, is now in bank accounts. It will help development," she said. The ruling party claimed positive reaction towards demonetisation, quoting surveys. "This is reflected in the fact that even after 50 days, there was not a single major incident in the country. There was no loss of public property and there was no loss of people's patience anywhere in the country." BJP dismissed allegations that demonetisation was an abrupt decision, claiming that the resolution was taken with full-fledged preparations. Listing the government's efforts to curb black money leading to demonetization, the resolution cited constitution of a SIT, introduction of Income Declaration Scheme, Jan Dhan Scheme, Black Money Act, Bankruptcy Insolvency Law, DRT Amendment Law and Benami Property Act, Press trust of India reported. The party named various efforts by the government to promote a cashless, corruption free India through UPI, USSD, AEPS and Rupay Card. "The BJP firmly believes that digital economy will stop the leakage of taxes. This Government has ended any role of middlemen from its beneficiary schemes like MNREGA, financial assistance to poor students, subsidies to marginal sections including SC/ST/OBC through digital transactions and Direct Benefit Transfers," the resolution said. (WION with inputs from PTI)

Reaction to demonetisation positive as not single major incident of violence reported: BJP at its executive meet

Three out of four economists summoned by the Standing Committee of Finance -- headed by Congress member of parliament Veerapa Moily -- today expressed deep concern about the demonetisation&nbsp;policy being pursued by the Indian government.

Noted economists Kavita Rao, professor at National Institute of Public Finance and Policy, Pronab Sen, former chief statistician to the government of India and Mahesh Vyas, chairman of Centre for Monitoring Indian economy, were critical of the demonetisation process whereas Rajiv Kumar, senior fellow, Centre for Policy Research argued for it in front of the committee.

&ldquo;This committee will submit its report on demonetisation on the first day of the Budget Session of the Parliament,&rdquo; said a member of the committee on the condition of anonymity.

Sources confirmed to WION&nbsp;how&nbsp;the conversion of cash economy into digital would take place within the confined time declared by the central government.

All three economists who expressed concern on demonetisation spoke on the issue of counterfeit currency, inflation and black money.

The economists argued in the committee that a lot of unaccounted black money does not exist in cash and is parked in other sectors of the economy.

Sources also confirmed that three economists said that currency reform might end up spiking the inflation instead of reducing it.

Lastly, it was also argued that for a meaningful war against black money, government should have&nbsp;de-notified a part of the currency every two years.

The Committee has decided to call Urjit Patel, the Reserve Bank of India governor, and members of the Indian Banking Association on January 19.&nbsp;

The meeting was also attended by former prime minister Manmohan Singh.

Even Prime Minister Narendra Modi is expected to meet economists on December 27 to discuss the state of economy. That day, the economists in the first half will meet the Finance Minister Arun Jaitley and spend second half with the PM.

Since the exercise has become politically contested, every opinion of experts in this field counts both for the government and the Opposition.

(WION)

&nbsp;

Prime Minister Narendra Modi is set to meet the economists next week

Three out of four economists summoned by the Standing Committee of Finance -- headed by Congress member of parliament Veerapa Moily -- today expressed deep concern about the demonetisation policy being pursued by the Indian government. Noted economists Kavita Rao, professor at National Institute of Public Finance and Policy, Pronab Sen, former chief statistician to the government of India and Mahesh Vyas, chairman of Centre for Monitoring Indian economy, were critical of the demonetisation process whereas Rajiv Kumar, senior fellow, Centre for Policy Research argued for it in front of the committee. “This committee will submit its report on demonetisation on the first day of the Budget Session of the Parliament,” said a member of the committee on the condition of anonymity. Sources confirmed to WION how the conversion of cash economy into digital would take place within the confined time declared by the central government. All three economists who expressed concern on demonetisation spoke on the issue of counterfeit currency, inflation and black money. The economists argued in the committee that a lot of unaccounted black money does not exist in cash and is parked in other sectors of the economy. Sources also confirmed that three economists said that currency reform might end up spiking the inflation instead of reducing it. Lastly, it was also argued that for a meaningful war against black money, government should have de-notified a part of the currency every two years. The Committee has decided to call Urjit Patel, the Reserve Bank of India governor, and members of the Indian Banking Association on January 19. The meeting was also attended by former prime minister Manmohan Singh. Even Prime Minister Narendra Modi is expected to meet economists on December 27 to discuss the state of economy. That day, the economists in the first half will meet the Finance Minister Arun Jaitley and spend second half with the PM. Since the exercise has become politically contested, every opinion of experts in this field counts both for the government and the Opposition. (WION)

Three economists argue demonetisation may not bring desired result

Jaitley said small enterprises with an annual turnover of up to 20 million rupees could save up to 30 per cent in tax payments

Indian finance minister Arun Jaitley on Tuesday addressed the media and said the government will offer tax incentives to small scale businesses engaged in cashless transactions, news agency Reuters reported. The incentives will be applicable to small scale businesses with a turnover of up to 20 million rupees ($294,000). Jaitley said the move would enable such businesses to save up to 30 per cent in tax payments, Reuters reported. He also said further amendments had been made to how small traders are taxed in order to boost digital payment, the Financial Express reported. Jaitley further said that anybody who still has old currency must deposit the amount with his or her bank at one go, The Financial Express reported. If somebody goes to the banks every day, it raises questions, Jaitley said. Since the government's demonetisation of India's 500- and 1,000-rupee note, the government has come out with a raft of incentives to encourage cashless transactions. It has also come out with a host of orders governing how the old notes are to be exchanged for new currency. (WION with inputs from Reuters)

India to offer tax breaks to small businesses that go cashless: Fin Min

Bj&ouml;rn Ulvaeus led Sweden&rsquo;s cashless revolution. When it comes to talking about a cashless economy, the name of Sweden tops the charts. It is an interesting story as to how Sweden turned into a cashless economy. Bj&ouml;rn&rsquo;s son&rsquo;s Stockholm apartment was burgled twice in 2008. The incident set him thinking that if Sweden were a cashless society, then the robbers won&rsquo;t be able to sell what they stole.

Two years later, Bj&ouml;rn opened the ABBA Museum that didn&rsquo;t accept cash. People as well as banks started to take notice of this. The Swedish banks created a cashless app, &lsquo;Swish&rsquo;, and soon, Swedes began Swishing.

By 2011, Sweden&rsquo;s society was completely revolutionised. Bills and coins made up just 2 per cent of Sweden&rsquo;s economy. Only 20 per cent of transactions in Sweden were taking place in cash compared to 75 per cent in rest of the world.

Where did it all begin?

Theft may have been the reason to inspire a citizen of Sweden to revolutionise the country into a cashless economy, India has several of its own issues that should motivate its government and the citizens to take concerted steps to move towards a cashless economy.

Corruption leading to a mammoth black economy is eating away the Indian economy from within every day. But an important question to ask at this point is that how did we reach here? How did it all begin?

At the time of independence, the Indian economy adopted a mixed economy model with the government having significant control over the private sector. To start any industry or to even slightly change a product, an individual needed to take a license or seek permission of the government i.e. the infamous bureaucrat.

It may have been a good policy for a newly independent young nation where every sector and individual needed the guidance of its elected representatives. However, this guidance was stretched too far, so much that it started suffocating its own citizens. The laws became so overbearing that during the regime of Indira Gandhi 1973-74, India&rsquo;s personal income tax had eleven tax brackets with highest marginal income tax rate of 97.5 per cent. And god forbid, if one&rsquo;s income was in the range of Rs. 10 lakh to Rs. 10.3 lakh, then the maximum marginal rate of tax was 103 per cent.

Thus, people started finding ways to circumvent their own laws. Bribing the bureaucrats to get a license to start an industry became a common practice. It became the habit of people to find loopholes in the laws to avoid taxes. Even with Indian economy going under several positive transitions over the years, this habit has not changed and we have created a black economy that accounts for almost 23.7 per cent of India&#39;s GDP. According to the government data, only 3.8 per cent of Indian&rsquo;s pay taxes.&nbsp; Changing people&rsquo;s behaviour is another huge challenge that the government is facing.

Corruption may have given birth to a black economy in India but now this parallel economy has taken a life of its own. It is plaguing every sector of the economy. It is the in the higher education sector in the form of paid seats, in the real estate sector, in trade in the form of misinvoicing, political campaigns, small businesses largely running on unaccounted cash etc.

Where do we stand now?

What many Indians do not understand is that the black economy may be benefitting them in the short-term but in the long run, it serves no good. When one pays for his/her home in cash, one is contributing significantly in inflating the prices in the housing sector.&nbsp;One is fooled into thinking that the prices are rising. What is really happening is that the cash economy which has been flooding the real estate is going to make a killing. The plan is so subversive that even somebody who only has white money is made to change into black and in the process making the real estate&rsquo;s mafia&rsquo;s black money into white. It is like a Ponzi scheme, just that people don&rsquo;t realise that they are being sucked into it.

The cash economy further deepens corruption. Only if there is cash floating around can one give away unaccounted cash for bribery or other illicit activities.

Don&rsquo;t get lost in the present mess

After the government&rsquo;s announcement on November 8th to recall 500 and 1000 rupee denomination notes, there has been serious liquidity crunch in the economy as these notes constituted almost 86 per cent of the circulation. &nbsp;

As a result, there have been long waiting lines to exchange money, causing inconvenience to the citizens of the country. However, the challenge that the economy is looking at in the face of black money, this is a small price to pay. &nbsp;

The challenge is so strong that it would have been impossible to make any significant change by taking baby steps. Somebody said that by making small changes in how a candle works would not have led to the discovery of electricity and then a bulb. It required a completely revolutionary and out of the box thinking. Similarly, only a dramatic change like the current one can put India&rsquo;s name on the list of one of the least corrupt countries in the world.

A peek into the history of cashless transactions may be the key to helping us deal with current times

Björn Ulvaeus led Sweden’s cashless revolution. When it comes to talking about a cashless economy, the name of Sweden tops the charts. It is an interesting story as to how Sweden turned into a cashless economy. Björn’s son’s Stockholm apartment was burgled twice in 2008. The incident set him thinking that if Sweden were a cashless society, then the robbers won’t be able to sell what they stole. Two years later, Björn opened the ABBA Museum that didn’t accept cash. People as well as banks started to take notice of this. The Swedish banks created a cashless app, ‘Swish’, and soon, Swedes began Swishing. By 2011, Sweden’s society was completely revolutionised. Bills and coins made up just 2 per cent of Sweden’s economy. Only 20 per cent of transactions in Sweden were taking place in cash compared to 75 per cent in rest of the world. Where did it all begin? Theft may have been the reason to inspire a citizen of Sweden to revolutionise the country into a cashless economy, India has several of its own issues that should motivate its government and the citizens to take concerted steps to move towards a cashless economy. Corruption leading to a mammoth black economy is eating away the Indian economy from within every day. But an important question to ask at this point is that how did we reach here? How did it all begin? At the time of independence, the Indian economy adopted a mixed economy model with the government having significant control over the private sector. To start any industry or to even slightly change a product, an individual needed to take a license or seek permission of the government i.e. the infamous bureaucrat. It may have been a good policy for a newly independent young nation where every sector and individual needed the guidance of its elected representatives. However, this guidance was stretched too far, so much that it started suffocating its own citizens. The laws became so overbearing that during the regime of Indira Gandhi 1973-74, India’s personal income tax had eleven tax brackets with highest marginal income tax rate of 97.5 per cent. And god forbid, if one’s income was in the range of Rs. 10 lakh to Rs. 10.3 lakh, then the maximum marginal rate of tax was 103 per cent. Thus, people started finding ways to circumvent their own laws. Bribing the bureaucrats to get a license to start an industry became a common practice. It became the habit of people to find loopholes in the laws to avoid taxes. Even with Indian economy going under several positive transitions over the years, this habit has not changed and we have created a black economy that accounts for almost 23.7 per cent of India's GDP. According to the government data, only 3.8 per cent of Indian’s pay taxes. Changing people’s behaviour is another huge challenge that the government is facing. Corruption may have given birth to a black economy in India but now this parallel economy has taken a life of its own. It is plaguing every sector of the economy. It is the in the higher education sector in the form of paid seats, in the real estate sector, in trade in the form of misinvoicing, political campaigns, small businesses largely running on unaccounted cash etc. Where do we stand now? What many Indians do not understand is that the black economy may be benefitting them in the short-term but in the long run, it serves no good. When one pays for his/her home in cash, one is contributing significantly in inflating the prices in the housing sector. One is fooled into thinking that the prices are rising. What is really happening is that the cash economy which has been flooding the real estate is going to make a killing. The plan is so subversive that even somebody who only has white money is made to change into black and in the process making the real estate’s mafia’s black money into white. It is like a Ponzi scheme, just that people don’t realise that they are being sucked into it. The cash economy further deepens corruption. Only if there is cash floating around can one give away unaccounted cash for bribery or other illicit activities. Don’t get lost in the present mess After the government’s announcement on November 8th to recall 500 and 1000 rupee denomination notes, there has been serious liquidity crunch in the economy as these notes constituted almost 86 per cent of the circulation. As a result, there have been long waiting lines to exchange money, causing inconvenience to the citizens of the country. However, the challenge that the economy is looking at in the face of black money, this is a small price to pay. The challenge is so strong that it would have been impossible to make any significant change by taking baby steps. Somebody said that by making small changes in how a candle works would not have led to the discovery of electricity and then a bulb. It required a completely revolutionary and out of the box thinking. Similarly, only a dramatic change like the current one can put India’s name on the list of one of the least corrupt countries in the world.

Cashless but not moneyless

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