Mar 08, 2017

Government indulging in 'extortion' in name of Digital India: Congress

BYPankaj Mishra

The Congress on Tuesday alleged that the Narendra Modi government was indulging in “plain extortion” in the name of Digital India by levying various taxes and charges on digital transactions.
“After forcing the devastating decision of demonetisation upon the people of India, the Narendra Modi government is brazenly indulging in organised loot and legalised plunder in the name of digital transactions,” Congress spokesman Randeep Singh Surjewala said here.
“In the name of digital transactions, last year the government earned Rs 6,750 crore through taxes/charges from us. This year, this amount is expected to climb to Rs 26,000 crore,” he added.
He said that there are five types of charges/taxes levied by the government, viz, Merchant Discount Rate (MDR) when one pays through cards, over the counter transaction charges, charges on ATM transactions after a fixed number of transactions in a month, charges for not maintaining a minimum balance and charges on online transactions.
“We were told the cost of printing new currency notes would be around Rs 12,000-15,000 crore. To recover this cost, the government is now levying all kinds of charges and taxes. This is nothing but plain extortion in the name of Digital India,” he added.
As of now the Merchant Discount Rate (MDR), that is, the rate charged to a merchant by a bank for providing debit and credit card services, which is paid by the consumer is 0.25 per cent for a debit card transaction worth Rs 1,000; 0.5 per cent for a debit card transaction worth Rs 1,001 to Rs 2,000; and one per cent for a debit card transaction more than Rs 2,000.
“According to various media reports, the MDR can now be increased from April 1, 2017. We urge the Government to not fleece the already burdened citizens of the country,” he said.
Surjewala pointed out that the banks have started charging Rs 150 per transaction for cash deposits and withdrawals beyond four free transactions in a month.
According to new rules, up to five non-home branch transactions will be free, subject to a maximum per-day deposit of Rs 50,000. For larger deposits or the sixth transaction, bank would charge Rs 2.50 per Rs 1,000, or Rs 95 per transaction, whichever is higher.
“These charges amount to burning holes in the pockets of the hard working honest citizens. Why should people pay to withdraw and deposit their own hard earned money?” Surjewala said.
The Congress leader also criticised the State Bank of India’s reintroduction of “minimum balance” rule for savings bank accounts under which a customer would be charged an amount for not maintaining a minimum of Rs 5,000 in his account.
“The UPA government in 2012 had done away with this charge, but the Modi government has re-introduced it,” he said.

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Pankaj Mishra is a writer of FactorDaily.