I don't think adding a 0.5% surcharge to transactions over Rupees 2000 is "pound foolish". Most transactions are smaller, and someone has to pay to maintain the infrastructure. :shrug:
Also: just because money is being wasted on cause $X does not mean that there's more of it lying around to be wasted on cause $Y! You've got to draw the line somewhere!
> someone has to pay to maintain the infrastructure
Do you know what it costs to run the cash infrastructure? Maintaining physical branches, employees to handle cash, counting machines, counterfeit detectors, security personnel, armoured transport, theft risk etc. The costs of maintaining a centralised digital infrastructure pales in comparison to this. If anything you should get a discount for using digital.
> someone has to pay to maintain the infrastructure. :shrug:
Under Indian law, companies must spend 2pc of their net profit on CSR activities (corporate social responsibility). Ask banks to use that money. The Indian banking sector made a combined profit of $40B this year. 2pc of that is $800M. Close to the $1B number.
> You've got to draw the line somewhere!
Draw it in the farm sector! They do not have to pay income tax on their income, get subsidies on fertilizers, free electricity, guaranteed prices for their crops. Small farmers cannot take advantage due to average holding size, and large farmers laugh all the way to the bank!
I think you overestimate how many millionaire farmers we have. Most of Indian farm sector is small holdings and they need the subsidies. Most of the power is with intermediaries and not farmers themselves. The intermediaries fund the farmers through high interest loans and additionally they provide distribution. The situation is much more complex and needs a thorough rework.
Is "2pc" the same as 2%?
Yes. Habit from typing on the phone where the % sign is hidden away somewhere on my keyboard!