The Committee of Chief Ministers on demonetisation has recommended abolition of the Merchant Discount Rate charges (MDR) to incentivise the digital transactions.
Headed by Andhra Pradesh Chief Minister Chandrababu Naidu, the Committee on Tuesday submitted a copy of recommendations on encouraging digital economy to Prime Minister in New Delhi.
It has also suggested putting a curb on large transactions and wanted levying of banking cash transaction tax on Rs 50,000 and above.
The committee comprising Maharashtra Chief Minister Devendra Fadnavis and Madhya Pradesh Chief Minister Shivraj Singh Chouhan has also asked the Centre to promote Aadhaar Enabled Payment System (AEPS) by incentivising and not charging MDR.
According to the report,that the number of (cashless) pay points per million people are 1,080 in India as against 31,096 in Singapore, 30,078 in the UK, 25,241 in Brazil, 7,267 in South Africa, 7,189 in Mexico and 16,602 in China.
A Rs 1,000 subsidy for purchase of smartphones by non-tax assesses and small merchants and a cash transaction tax on withdrawals of Rs 50,000 and above in banks have been recommended by the panel to encourage digital payments.