The Centre on Wednesday approved a draft ordinance to disburse government salaries through cashless methods, The Hindu reported on Wednesday. The ordinance will require state administrations to notify industries to allow the payments of wages through cheques and direct credits to bank accounts. However, the existing provisions of payment in current coin or currency notes will be allowed as well, the government clarified in a statement.
The ordinance has proposed amendments to Section 6 of the Payment of Wages Act, 1936, to enable digital modes of payment. The current law says that all wage payments should be made in cash, with employers requiring written permission from employees to pay salaries through cheques or bank transfers.
In a proposal dated December 2, the Union Labour Ministry said such a move would “reduce complaints regarding [the] non-payment or less payment of minimum wages” as well as enabling the transition to a cashless economy. Earlier this month, Union Labour Minister Bandaru Dattatreya said the Union Cabinet had discussed potential amendments to the existing Act.
Following the demonetisation of Rs 500 and Rs 1,000 currency notes, the Centre has been pushing for a cashless economy by promoting digital payment services and introducing schemes to incentivise such payments. The prime minister said the step to discontinue the high-value currency was taken to fight black money, corruption and the circulation of counterfeit currency in the country.