The Finance Ministry has appointed a committee to suggest ways to incentivise use of plastic currency.
Guidelines for schemes related with monetisation of gold are also set to be in place by May.
“The committee will look at what structures can be put in place to encourage use of credit or debit cards,” Finance Secretary Rajiv Mehrishi told reporters.
He said that measures such as incentivising banks by way of sharing transaction cost, reimbursing cost of machine to be placed at shops, expenditure by a person in a five-star hotel above ₹5,000 to be settled by credit or debit card are being considered.
Card transactions Finance Minister Arun Jaitley, in his Budget speech, had said that the government will announce incentives to encourage card usage by consumers to curb black money.
“One way to curb the flow of black money is to discourage transactions in cash. Now that a majority of Indians have, or can have, a RuPay debit card, I, therefore, propose to introduce soon several measures that will incentivise credit or debit card transactions, and disincentivise cash transactions,” he said.
Mehrishi guidelines for new gold monetisation scheme are expected in the next two months “We want to issue the guidelines a soon as possible. If you ask me the time frame realistically, I would say, I will be very happy if the guidelines are issued by May, but how much time it will take, I don’t know,” he said.
To curb gold imports and monetise large idle stocks of the precious metal, the Budget has proposed introducing a monetisation scheme to replace the present gold deposit and gold metal loan schemes. The new scheme will allow depositors of gold to earn interest in their metal accounts and jewellers to obtain loans in their metal account. Banks as well as other dealers will also be able to monetise this gold.
Current account deficit Though gold stocks in India are estimated to be over 20,000 tonnes, most of this is neither traded nor monetised, the Finance Minister said.
The move will also help in containing trade deficit and current account deficit (CAD), the net difference between outflows and inflows of foreign currencies. CAD had peaked to 6.7 per cent of GDP in the third quarter of 2012-13.
The Economic Survey estimates CAD to fall below 1 per cent in the next fiscal on the back of easing of global commodity prices, including petroleum products. India imports gold up to 1,000 tonnes a year and is one of its largest importers.