India To Encourage Non-Cash Payments

BENGALURU: India is working towards policies and regulations that would encourage non-cash payments to effectively tackle the problem of black money, a top Indian economic adviser has said.

"India will be looking to encourage electronic payment as opposed to cash payment. Both because it is desirable, also to tackle the problem of black money and things like that," Chief Economic Adviser Arvind Subramanian said.

"So that is very much on the agenda," he told a Washington audience at Peterson Institute for International Economics.

Subramanian said he is surprised by the dynamics of e-commerce and that companies such as Flipkart are challenging global giants like Google.

"But one of the challenges for India is to improve the financial regulation. Because a lot of these companies find it is actually better to locate in Singapore, both for regulatory reasons and for tax reasons.

"So I think that's something that we are going to address. The government is very aware of it. The financial sector reforms are kind of geared to actually addressing this problem," he said.

Responding to a question on subsidies, Subramanian said that the Indian government has acted very aggressively in raising taxes, excise taxes on diesel and petrol.
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