Fighting black money, providing inclusion, enhancing the delivery of public services etc. the digital economy got top priority in the new budget. There is no tax at all for the manufacturing of certain types of digital economy equipments. All taxes – the customs duties (BCD, CVD, SVD) and excise duties were abolished for domestic manufacturing of digital economy equipments like POS machines and Micro ATMs.
Digital economy is one of the ten distinct themes of the budget. Some of the other themes farmers, rural population, youth etc. “Promotion of a digital economy is an integral part of Government’s strategy to clean the system and weed out corruption and black money.”
One big step is limiting physical cash settlement to 3 lakh rupees. Such a move will promote digitalization besides raising accountability of transactions.
Mainstreaming of financial savings will occur with digital economy (increased savings to banks)
The FM revealed that digital economy helps to formalize the economy implying that economic transactions will be transparently revealed to the government with the spread of digital economy. more than anything, the budget pointed out that digital economy will led to mainstreaming of financial savings into the banking system. At present, the financial savings is low and several avenues of black money creates opportunity to invest in real estate. Once digital transaction mode are developed, such illegal channelization of savings will stop.
Budget has reminded the helping hand of JAM trinity for poor man.
New Aadhar based digital payment products both for consumers and merchants including Aadhar Pay
The budget continued revolution on digital payment front. BHIM’s use will be enhanced with the launch of Referral Bonus Scheme for Individuals and the Cashback Scheme for merchants. Aadhar Pay, which is a merchant version of the AEPS (Aadhar Enabled Payment System) is another step. Government aims 2500 digital payments for 2017-18.
Digital payment infrastructure in institutions including universities, hospitals, colleges, petrol pumps etc. will be promoted.
Creation of a Payments Regulatory Board and amendment to Payments and Settlement Act 2007 are legal supportive measures in the budget towards digital economy.
Reducing the limit of cash donations to trust and political parties also carries the message of cashless transaction.
Lower presumptive tax burden for cashless transfer proposed in the budget is a wonderful way to encourage SMEs to accept digital payments.
Cashless transaction economy- customs duty and excise duty were abolished
For the promotion of cashless transaction equipments and their domestic manufacturing, the basic customs duty, countervailing duty and special additional duty of imported components were abolished. Similarly, the excise duty of several POS machine components were eliminated. Miniaturized card reader for m-POS, Micro ATM, finger print reader, scanner, iris scanner etc. will get benefit. The excise duty of these items also were eliminated.
About digital economy acting as a them, the FM added that speed, accountability and transparency will be enhanced through digital economy.
