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Saturday, February 25, 2012

Make Payments involving Government electronic to curb corruption

Writing a post after a long long time, but was so preoccupied this whole time. Well anyways I am back and this post is regarding -making all government payments electronically, whether the payment is to be made by the government or to the government. It should all be done electronically. Making Payments in which government offices are involved electronically or using cash cards is very important for putting an end to corruption in India, which is corrupt from the root to the highest branch(if we consider India as a tree). There are many advantages of electronic payments over cash payments such as it is much convienient, goes through a bank so no question of black money because Income tax guys have direct eye on high value transactions made electronically. The only disadvantage for the ministers and government officers is that their personal pockets are not filled ie they cant take bribe. To compliment electronic transactions, there should be a premium value(in percentage) in case one has to use cash. This system which I am talking about is not new and is already implemented in many countries, I would give a self example.
During my visit to london in 2010, I went to CarphoneWarehouse showroom for purchasing a mobile phone, It costed 40 pounds and 10 pounds mandatory topup. When I asked for how much I have to pay in cash, the lady told 60 pounds, I argued that in your website You have mentioned 50 pounds which includes topup, she replied if you are paying using a card then you have to pay 50 pounds total else in cash the deal is of 60 pounds. So such scenario will automatically encourage payments electronically rather then conventional methods of payment.
Talking of above case in Indian scenario for payments involving government, suppose government has thrown a tender for some infra project and waits for the minimum bid, Now presently we all know the whole tender process of center and state governments involve lot of bribes to the ministry involved for selection of tender, If whole payment has to be made electronically then one thing is for sure that money involved would be white as no-one can forge bills with wrong values(as it is done presently). This way of electronic payments should then be gradually adopted by non-governemnt institutes, But the most important thing for its implementation is that MP's have to pass a bill making it a law. This condition is most difficult to happen as ministers doesnot want an end to hard cash method of payment. If present corrupt Government of India adopts this method then there would be drastic decrease in black money revolving along with the white economy. Recently UID chairmen Nilekani also proposed thet all payments above 100 Rs should be made electronically. I may have missed certain scenarios in which such method might not be as effective as cash, you can always add that in comment section.
The other obstruction in this appraoch is present thinking of people which give a sort of meagre discounts on cash payments whereas ideally it should be vice-versa. Property prices all over the world are tasting dust but in india there is no decrease in property prices because whole real estate sector thrive on black money. Another advantage of electronic payment methods is that there would be tremendous increase in direct and indirect tax collection of the government as presently there is no tax collection from transactions involving black money.