Arun Jaitley wants cashless economy to reduce corruption, tax evasion

Published: October 04, 2017 16:51:30 | Updated: October 25, 2017 05:19:24

Visiting Indian Finance Minister Arun Jaitley addresses a seminar at Hotel Sonargaon in Dhaka on Wednesday. -Focus Bangla Photo

Visiting Indian Finance Minister Arun Jaitley supports cashless economy as a cash-based economy harms the poor and supports corruption.

"If the economy depends mostly on cash, the curse of cash hits you,” Jaitley said during a talk at Hotel Sonargaon in Dhaka on Wednesday, reports bdnews24.com.

“Cash leads to corruption and tax evasion. Excessive cash operates against the poor. A lot of terror activity thrives on cash," he said.

The Indian finance minister inaugurated a cashless service at India’s visa application centres in Dhaka’s Shyamoli and Sylhet.

The service would now be available at all 12 Indian visa application centres across Bangladesh.

Since the first day in office, the government has taken initiatives step by step to drive India in the direction of making the economy less cash-based.

“In 2014, we discovered that although we had a very large banking network in India, only 58 per cent of Indians or Indian families are connected to the banking system,” he said.

It means 42 per cent of the population was completely outside financial inclusion.

“Therefore, the very first challenge before the government was how to bring them into the banking network.”

In the days that followed, the Modi administration launched a mission to visit every house, every family. Banking correspondents and representatives visited every home, enabling India to open 300 million bank accounts in both rural and urban areas in three years.

The progress was impressive, but a new challenge loomed: the majority of the accounts had zero balance. “So the rules were amended to allow account holders to have zero balance,” Jaitley said.

India also incentivised people to keep holding these bank accounts. Zero balance accounts have declined from 76.8 per cent in September 2014 to 21.4 per cent by August 23, 2017, according to a report by the Wire.

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