E-payment system likely to curb black money

October 08, 2012 09:38 IST

The government might be finding the Vijay Kelkar panel's recommendations on subsidy reduction too hot to handle but it is eager to implement the committee's suggestions on curbing the cash economy to counter black money.

According to a senior finance ministry official, Finance Minister P Chidambaram [ Images ] is in favour of launching a systematic plan to counter black money through extension of electronic payment systems through the country, especially covering all government transactions.

The official said officials had already started work on the minister's views on the Kelkar panel's various recommendations, and a meeting under Economic Affairs Secretary Arvind Mayaram in this regard took place on Friday.

He added that besides concretisation and implementation of an electronic payment system across the board in government transactions, including tax collection and expenditure, important measures to curtail use of unaccounted cash in the subsequent elections were in the offing.

The Kelkar committee said: "The movement towards electronic payments for all government transactions, and a general reduction in the usage of cash in the economy will help transition from the informal economy to the formal economy. This will help curb corruption, increase transparency and accountability."

It has pointed out an efficient and ubiquitous large and small value electronic payment system throughout the country would make it possible for the Centre to accurately predict and collect revenues on the one hand, while managing expenditure efficiently on the other.