The Union Cabinet on 21 December cleared the ordinance to let companies and businesses pay salary via electronic mode and cheques. The government is now all set amend the Payment of Wages Act which will allow the companies to take the digital route to make payments to their employees.
This particular move will allow the government to facilitate their and back their vision of a cashless economy. The Payment of Wages (Amendment) Bill, 2016, seeks to amend Section 6 of the principal Act which will allow the employers to pay salaries on their employee’s accounts directly instead of paying them with cash.
However, the pa order will be applicable to central government-administered establishments only and not on the state-administered institutions. The move is also undertaken to keep a check on corruption in the organisations.
Prime Minister Narendra Modi and Finance Minister Arun Jaitley had recently announced a number of incentives while promoting PM Modi’s idea of a digital and cashless economy.
Some of them include, Insurance cover worth Rs 10 lakhs will be given to those who book railway tickets through digital mode. Additionally, 5% discount on digital payment mode for railway facilities like catering, retiring rooms will also be given.
In the wake of demonetisation, all CBSE affiliated schools in the country will go cashless from January, 2017. The school will accept tuition fee only through online transaction. Also, staff payment will not be made in cash but through online. The move will bring about a revolutionary change in the way money transactions are made at private schools. This could also act as a deterrent to exorbitant amount of donations charged at private schools. These kind of transactions usually takes in the form of cash.