Plastic is Gold!

The move to incentivise use of credit and debit cards through tax concessions is welcome. Majority of Indians yet prefer cash transactions, a practice encouraged by commercial establishments for a variety of reasons. An estimated 85% plus consumer expenditure transactions today are in cash. The government rightly wants to curb the black money flow. India had about 20 million operational credit cards last year with about two million cards issued every year. This is obviously a modest number given the size of the spending consumer class. With the Credit Information Bureau, CIBIL, proactively weeding defaulters from the system, banks must shed their inhibitions in issuance of credit and debit cards. The government must also quickly announce the incentives on use of plastic money. India is a cost conscious economy: lure of a genuine discount would sure help promote use of plastic money.



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