Businesses reluctance for Cash-less Payments-
By: Amit Bhushan Date: 17th December 2016
The government pressing for the digital payments or cash-less modes, is a welcome step. It would not only ensure a better playing field for all businesses, since those corrupt and/or politically connected may not be able to get away easily or may be as easily as previous. However the government must mandate support for at least one cash-less mode for all businesses with turnover of more than 12 lacs in goods and trade segment and over 5 lacs in services segment. The food service stall or Thelas/Carts serving poor and operated by the poor would be able to survive including the paan shops, however the bigger shops for goods or retail, service sectors like doctors etc. would probably run out of excuse for not supporting cash-less payments. The permanent food joints or local kiryana stores would be pushed to embrace cash-less. This would also ensure that competition shifts to offering actual convenience to in terms of payment modes supported by these shops and compliance. The social organizations like schools or day-care centers, medical service providers, residential welfare society services etc. should also be covered for cash-less depending upon their ‘turnover’. Those businesses with superior and customer friendly practices will be able to cope much better while those which may be stay put on account of other factors including political patronage, would need to change such practices.
Initially there can be a one-time incentive for all such registered businesses embarking of the cash-less payment infra upto Five thousand rupees which can be filed through the supporting companies or banks, provided that such businesses have shown at least 5 transactions per month for the year. Such scheme can be valid for till March 2018. The government has in case given subsidy to businesses for seeking credit ratings etc. even if they have been of little use. At least the cash-less drive would mean greater compliance as well increased tax collection and thus pay for the government’s efforts. From a tax standpoint, the focus then can shift on businesses that have a high cash to overall sales ratio or businesses which have potentially high turnover but not adhering adequately to cash-less payments. The government may come out with some incentive schemes for public to promote adoption of cash-less modes of payments, better awareness of consumer rights and protection amongst other things. The associations of businesses and industries can then take on municipal workers and the politicized bureaucrats & police for smooth functioning of the compliant small businesses, however this can only be possible if there is large scale adoption of cash-less transactions amongst businesses. Regulatory push in this regards may have a role rather than reliance on encouragement or chatter alone.
While there have been valid arguments for a change in political funding in the commercial news media, however political funding is also subject to demand and supply. Those businesses which have certain interests would always find a way to reach out political leaders and parties which can help them secure their interests. While it may be desirable that the political leadership does not succumb to such temptations and that there are adequate barriers, however if Cash based businesses are flourishing, then it may not be possible to control the spread of such influence amongst a larger number of businesses. It is therefore incumbent upon government to allow small businesses to be able to function with the least amount of political interference but in a compliant fashion. The move to cash-less therefore ensures that the mass business segments have a potential to get away from the ‘hafta’ syndrome that is afflicting a large base in the economy and allowing the small businesses make a socially acceptable excuse for not complying with taxes and other compliance measures.
Of course rooting out the Black-money and its transfer to the poor and the role of Demonetization for such a push can have various arguments and the overall debate can be twisted in whichever possible way. However, there has been little arguments for Cash-less so far other than enumeration of technical difficulties. As such business transactions deepen and constant media prowl for rating providers for security, we shall such businesses steadily investing to improve on these factors. In fact instead of generic reporting the media may be better off by putting up comparisons for different providers regards consumer security or presenting analyst reports in this regards which would shape consumer choices. Why is this done only for automobiles or electronic widgets alone??? This is well known and well understood. While some in the media may have argued about a lack of knowledge and skills for different cross-sections of the population, however for businesses to become compliant with law cannot be argued or wished away. For the poor workers of individuals who may need to upgrade himself/herself, a support system is most likely to spring up through social efforts itself or through mass-media itself. The government has already announced a channel in this regards.
While the political efforts are being spent on economic issues with the key parties claiming a wider acceptability for their point of view, what may be important to note that Demonetization has firmly brought economic issues to the main-stream. It is therefore parties which have a clearer economic well-being agenda, which can claim an upper hand while those thriving o social equality or other themes may have to take a re-look on their policies. The leaders and parties may be better off by showcasing their agenda for job-creation and pitting it against the job-destruction policies of other parties since the public have some recent experience (amongst masses) regards how government policies can affect their well-being. So demonetization actually re-sets the ‘game’, whoever wins is immaterial…
By: Amit Bhushan Date: 17th December 2016
The government pressing for the digital payments or cash-less modes, is a welcome step. It would not only ensure a better playing field for all businesses, since those corrupt and/or politically connected may not be able to get away easily or may be as easily as previous. However the government must mandate support for at least one cash-less mode for all businesses with turnover of more than 12 lacs in goods and trade segment and over 5 lacs in services segment. The food service stall or Thelas/Carts serving poor and operated by the poor would be able to survive including the paan shops, however the bigger shops for goods or retail, service sectors like doctors etc. would probably run out of excuse for not supporting cash-less payments. The permanent food joints or local kiryana stores would be pushed to embrace cash-less. This would also ensure that competition shifts to offering actual convenience to in terms of payment modes supported by these shops and compliance. The social organizations like schools or day-care centers, medical service providers, residential welfare society services etc. should also be covered for cash-less depending upon their ‘turnover’. Those businesses with superior and customer friendly practices will be able to cope much better while those which may be stay put on account of other factors including political patronage, would need to change such practices.
Initially there can be a one-time incentive for all such registered businesses embarking of the cash-less payment infra upto Five thousand rupees which can be filed through the supporting companies or banks, provided that such businesses have shown at least 5 transactions per month for the year. Such scheme can be valid for till March 2018. The government has in case given subsidy to businesses for seeking credit ratings etc. even if they have been of little use. At least the cash-less drive would mean greater compliance as well increased tax collection and thus pay for the government’s efforts. From a tax standpoint, the focus then can shift on businesses that have a high cash to overall sales ratio or businesses which have potentially high turnover but not adhering adequately to cash-less payments. The government may come out with some incentive schemes for public to promote adoption of cash-less modes of payments, better awareness of consumer rights and protection amongst other things. The associations of businesses and industries can then take on municipal workers and the politicized bureaucrats & police for smooth functioning of the compliant small businesses, however this can only be possible if there is large scale adoption of cash-less transactions amongst businesses. Regulatory push in this regards may have a role rather than reliance on encouragement or chatter alone.
While there have been valid arguments for a change in political funding in the commercial news media, however political funding is also subject to demand and supply. Those businesses which have certain interests would always find a way to reach out political leaders and parties which can help them secure their interests. While it may be desirable that the political leadership does not succumb to such temptations and that there are adequate barriers, however if Cash based businesses are flourishing, then it may not be possible to control the spread of such influence amongst a larger number of businesses. It is therefore incumbent upon government to allow small businesses to be able to function with the least amount of political interference but in a compliant fashion. The move to cash-less therefore ensures that the mass business segments have a potential to get away from the ‘hafta’ syndrome that is afflicting a large base in the economy and allowing the small businesses make a socially acceptable excuse for not complying with taxes and other compliance measures.
Of course rooting out the Black-money and its transfer to the poor and the role of Demonetization for such a push can have various arguments and the overall debate can be twisted in whichever possible way. However, there has been little arguments for Cash-less so far other than enumeration of technical difficulties. As such business transactions deepen and constant media prowl for rating providers for security, we shall such businesses steadily investing to improve on these factors. In fact instead of generic reporting the media may be better off by putting up comparisons for different providers regards consumer security or presenting analyst reports in this regards which would shape consumer choices. Why is this done only for automobiles or electronic widgets alone??? This is well known and well understood. While some in the media may have argued about a lack of knowledge and skills for different cross-sections of the population, however for businesses to become compliant with law cannot be argued or wished away. For the poor workers of individuals who may need to upgrade himself/herself, a support system is most likely to spring up through social efforts itself or through mass-media itself. The government has already announced a channel in this regards.
While the political efforts are being spent on economic issues with the key parties claiming a wider acceptability for their point of view, what may be important to note that Demonetization has firmly brought economic issues to the main-stream. It is therefore parties which have a clearer economic well-being agenda, which can claim an upper hand while those thriving o social equality or other themes may have to take a re-look on their policies. The leaders and parties may be better off by showcasing their agenda for job-creation and pitting it against the job-destruction policies of other parties since the public have some recent experience (amongst masses) regards how government policies can affect their well-being. So demonetization actually re-sets the ‘game’, whoever wins is immaterial…