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Q. Watal committee’s recommendations: Comment on recommendations of Watal committee on digital payments.
Dec 16, 2016 Related to : GS Paper-3

Ans :


The Committee headed by Shri. Ratan P. Watal, on Digital Payments constituted by the Union Government, has recently submitted its Final Report to the Government. The 11-member committee was tasked to review existing payment systems in the country and recommend appropriate measures for encouraging Digital Payments.

Recommendations of Committee-

  • Watal Committee has recommended series of doable measures within 30 to 90 days for accelerating growth of Digital Payments in India. 
  • The strategy must be backed with regulatory regime which is conducive to bridging the Digital divide by promoting competition, interoperability and open access in payments. 
  • It recommended for inclusion of financially and socially excluded groups and assimilation of emerging technologies in the market. 
  • It recalled the need of safeguarding security of Digital Transactions and providing level playing to all stakeholders and new players who will enter this new transaction space. 
  • Committee has suggested inter-operability of payments system between banks and non-banks, up-gradation of digital payment infrastructure and institutions.


  • The watal Committee has recommended medium term strategy for accelerating growth of Digital Payments in India. It has righty suggested an ecosystem of open access and vigorous competition to speedily incentivise digital payments countrywide. 
  • The committee’s felt the need of bringing  the specific changes into laws must be carried out swiftly. It has asked the government departments and agencies to eschew cash and opt for digital payments, and calls for a speedy changeover likewise in the districts and panchayats as well. 
  • The committee, rightly, wants mobile number and Aadhaar-based interoperability between banks and non-banks like Payment Service Providers.
  • It has rightly suggested bringing payment providers that are classified as systemically important under the central bank’s regulation
  • The digital payments call for 24×7 power and network availability across the country.  Hence to realise the true benefits of digital payments there a need to plug infrastructural shortcomings as early as possible.


There is a need to develop connectivity infrastructure parallel to the cashless push. More open platforms that have an interoperable framework are also important. In this background the committee has righty suggested medium term strategy. Now government needs to effectively implement these recommendations to realise the goal of cashless economy. 

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