The budget(2018-19) presented by finance minister Arun Jaitley mentioned that digital payments are key to the government’s policies. Following are some big takeaways:
On cryptocurrencies: The Finance Minister said the government currently does not consider cryptocurrencies as legal and said that the government will take all measures to eliminate the use of crypto assets in the payment system.
However, he said that the Government will still explore the use of blockchain technology for a digital economy. (The blockchain, the underlying technology in bitcoins and other cryptocurrencies, is a shared digital ledger which is continuously updated with all transactions. This ledger keeps a record of each transaction that occurs across a fully distributed or peer-to-peer network, either public or private.)
Note that Union Ministry of Finance had issued a warning on Bitcoin trading and other virtual currencies which are not backed by a government fiat. It also said that the price of Bitcoin is a matter of speculation and likened the trading of virtual currencies to Ponzi schemes. The Reserve Bank of India has also cautioned citizens, saying that any user, holder, investor, or trader dealing with cryptocurrencies would be doing so at their own risk. The Income Tax Department has been struggling to track bitcoin and other cryptocurrency investments as well, in spite of sending out about 5 lakh notices to HNI individuals.
It is to be noted that even though Bitcoin and other cryptocurrencies are not regulated by the government, they are not illegal in India.
On Fastags: The system of toll payments physically by cash being replaced by electronic payments with Fastags and other electronic payment systems. Number of Fastags has gone up from about 60,000 in December 2016 to more than 10 lakh now. The minister said that the government will come out with a policy to introduce toll system on ‘pay as you use’ basis.
Less-Cash: To control cash economy, Arun Jaitley said that the cash payments exceeding Rs 10000 in by trusts and institutions to be disallowed and would be subject to tax.
Online-loan sanctioning: The FM has proposed to onboard public sector banks and corporates on Trade Electronic Receivable Discounting System (TReDS) platform and link this with GSTN. Jaitley also said that online loan sanctioning facility for MSMEs will be revamped for prompt decision making by the banks.
Fintech policies: Ministry of Finance is examining the policy and institutional development measures needed for creating right environment for Fintech companies to grow in India