It should not come as a surprise that Plastic Money – Debit / Credit Cards can help the Government eliminate the Black Money / Parallel Economy if the Government takes certain determined measures and can also save big time on the currency printing charges.
Today, just 5% of Indian retail sales happen on the POS Terminal. The Government incurs Rs 2,800 cr printing the currency needed during any financial year, and thus 5% saving will mean a whopping Rs 140 cr.
The Government will also be able to track transactions, fraud etc. However, for this kind of system to take off, the Government must come up with Tax Incentives for Merchants. Banks should also be offered Tax Break on pushing pre-paid cash cards thus reducing the circulation of currency notes and building a nation with transparent wealth. Well the obvious question remains – How will we finance the General Elections ?