Finance Minister Arun Jaitley Wednesday encouraged developing countries to emulate India’s initiatives towards a less cash-based economy, saying excessive cash harms the poor, supports corruption and leads to terror activities. Jaitley, who is on a three-day visit to Bangladesh, inaugurated a cashless service at India’s visa application centres in Dhaka’s Shyamoli and Sylhet localties before announcing that it would now be available at all 12 Indian visa application centres across the country.
“If the economy depends mostly on cash, the curse of cash hits you,” Jaitley said during a talk at a hotel here.
“Cash leads to corruption and tax evasion. Excessive cash operates against the poor. A lot of terror activity thrives on cash,” bdnews24 quoted him as saying. Jaitley encouraged other countries to follow in India’s footsteps in pushing for a less cash-based economy. “Our roots are of common origin and so a lot of challenges are common in nature,” Jaitley said.
He also narrated a story on the success of Prime Minister Narendra Modi’s Pradhan Mantri Jan Dhan Yojana, a flagship project on financial inclusion. “One of the great challenges the Indian economy always faced was that it was cash-centric,” Jaitley said.
He said since the first day in office, the government has taken initiatives to drive India in the direction of making the economy less cash-based, the report said.
“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, adding that it means 42 per cent of the population was completely outside financial inclusion.
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“Therefore, the very first challenge before the government was how to bring them into the banking network. These are the people in rural areas, these are the people in tribal areas, these are the people in geographically remote areas. There were people who came from parts of central India which were impacted by left-wing extremism,” Jaitley said.
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, he said. The progress was impressive, but a new challenge loomed: the majority of the accounts had zero balance, he said.
“So the rules were amended to allow account holders to have zero balance,” Jaitley was quoted as saying.