Ban on high-value currency notes to boost to e-payments: Nasscom

Moneycontrol Bureau

IT industry body NASSCOM has welcomed the announcement by Prime Minister Narendra Modi, of scrapping high-value currency notes of Rs 500 and Rs 1000 denomination, and replacing the Rs 500 notes with a new design.

Companies such as Infosys, TCS, Wipro, Genpact, Mindtree, Microsoft, NIIT Technologies are members of Nasscom.

“If most of the black money is brought into bank accounts or into the tax net, there will be far less reason to deal only in cash, and far more reasons to transact through electronic payments,” said NASSCOM President R Chandrashekhar, who is a member of the Ministry of Finance Committee on Digital Payments, chaired by Ratan P Watal of NITI Aayog.

NASSCOM believes this move will also accelerate the push toward electronic payment, which presently has relatively little penetration in India, where cash accounts for 78 percent of all transactions by value according to the Reserve Bank of India.

This complements the other moves toward digital payments, including the foundation being created by the Pradhan Mantri Jan-Dhan Yojana under which 254.5 million bank accounts had been opened as of November 2, 2016.

“This is also a welcome move for the e-commerce industry, where a large number of deliveries in India are CoD or cash on delivery, raising logistics costs and risks. While other reasons for use of cash, such as trust, may take longer to alleviate, the present announcement could mitigate a significant factor driving CoD, the availability of unaccounted cash,” Nasscom said in a statement.(A preview of new currency notes)

The new currency notes will have Braille features for the blind. This historic step by the Government could, if optimally leveraged, hugely accelerate the migration to a digital economy, Nasscom said.