Industrial workers in India to get cashless payments

India’s quest to build a cashless economy

Business & Politics

News - Biz@India

December 13, 2016

/ By / New Delhi



Several digital payment platforms and banks have also closed the lid on extra charges on paying through cashless mediums till the end of this year

Several digital payment platforms and banks have also closed the lid on extra charges on paying through cashless mediums till the end of this year

As India is witnessing a spurt in digital payments after high-denomination currency notes were discontinued in early November this year, the government has now made it obligatory for contractors and employers to pay industrial workers through cheques or any other form of cashless transaction.

Post demonetisation of INR 500 and INR 1,000 currency notes in India, since November 9, 2016, the government has encouraged its citizens to go cashless and has introduced many initiatives to support the same.

This has turned into an opportunity for both the government and private players to take the country towards digital cash revolution. Several digital payment platforms and banks have also closed the lid on extra charges on paying through cashless mediums till the end of this year.

Besides these, with intent to widen the range of plastic money users, the government has now made it mandatory for contractors and employers of industrial and factory workers to either pay them through cheques or deposit the amounts directly in their accounts.

A Payment of Wages (Amendment) Bill 2016 has also been introduced in Section 6 of the Payment of Wages Act, 1936, in this concern, which will be tabled after the Cabinet approves of the amendment.

Under the new proposal, workers whose wages do not exceed INR 18,000 per month will be paid according to the new rule.

“One of the reasons for ineffective enforcement of payments of wages to workers is the payment of wages in cash. With the passage of time, technology has undergone a sea change. A large section of employed persons now have bank accounts,” an Indian daily quoted a source.

While the central government will have the mandate for workers employed by the railways, in air transport services and mines, and at oilfields, the respective state governments will identify other industrial and factory establishments.

According to the government, the amendment will be easy to implement as under the Pradhan Mantri Jan Dhan Yojana (Prime Minister’s People’s Money Scheme), it is now easier for people to open bank accounts and have an access to financial services in an affordable manner.

However, many people doubt the idea of implementing a cashless economy in a country where more than 85 pc of transactions are done by cash.

However, with so many reforms being made post demonetisation, it is yet to be seen if the people of the country are adequately empowered digitally and made aware of the benefits to make these changes a success.

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