New Delhi, August 28: To give a major push to Prime Minister Narendra Modi’s digitalisation initiative, the government is now planning to offer 2% incentive over the applicable GST tax rate in case of digital payments on bills up to Rs 2,000. This means an individual will have to shell out less if the payment is digitally done. As per reports by TOI, the proposal is being discussed between the finance ministry, RBI, cabinet secretariat and ministry of electronics and Information Technology. Also Read - 13 States Submit Borrowing Option to Centre to Fund GST Shortfall

The Prime Minister, while addressing the nation on the 71st Independence Day had asked people to use less cash and had encouraged individuals to shift to digital payments. The IT ministry has also launched a slew of initiatives to promote digitalization across the nation and is leading the efforts to further popularise electronic payments.Small transactions and are mostly preferred through the cash mode. According to a report by TOI, relief is being mooted for smaller transactions because they are large in numbers. Meanwhile, if an incentive can be given for big transactions of up to Rs 2,000 which are very high in volumes, it will provide an impetus to digital payments. Also Read - Will Take up GST Cut Demand With FM Sitharaman And PM Modi, Says Javadekar

If this move is initiated, it is believed to benefit individuals in the form of a discount or cash-back. It will help plug leakages while playing a credible part in countering the development of black money. Reports by TOI quoted a source saying that the main aim of this move is to incentivize all kinds of digital payments, especially smaller transactions that would in turn help in fulfilling the government’s plan of making India a less-cash economy. Also Read - GST Collection Drops For Second Month in August to Rs 86,449 Crore

There has been a fall in electronic transactions over the past few months. Digital transactions had picked up massively till March this year but then dropped considerably as the availability of cash went up. The number of electronic transactions went up post demonetisation from 67 crore in November 2016 to a peak of 89 crore in March 2017. A report by RBI stated that only 84 transactions were recorded in June, which is a major fall since November 2016.