e-payments may be made mandatory for small government transactions
In a move with far-reaching implications, the government has decided to go whole hog towards turning the country into a cashless economy. If reports are to be believed, the government may soon make cashless transactions mandatory for all transactions above Rs 1,000. Use of mobile wallets or digital payments may be promoted for the purpose.
It is often inconvenient for the people to make payments of small amounts through cheques or drafts for a government service. But with the introduction of cashless payments through mobile wallets, the process would become much easier.
The government said to be in the process of creating a framework for making all financial payments — inter-ministerial, vendor transactions or small payments by citizens for government services — electronic. This is part of a larger initiative by the Narendra Modi Government to move towards a cashless or less-cash economy.
According to a report, cash-based transactions are quite expensive, and by adapting cashless transactions for government services and fees, 5-7% of the GDP can be saved.
This massive push for electronic payments—part of the larger Digital India programme—is being spearheaded by the Department of Electronics and IT (DeitY).
Currently, most government payments and receipts are made by cash or cheque, said a senior official aware of the project called ‘e-payment’. “Our endeavour through this project is to ensure that at least 90%, if not more, of all government payments happen through some or the other electronic mode, be it through credit card, RTGS, DBT or mobile,” he said.
The report recommended that all payments above Rs 1,000 by the government and government institutions should be made electronically. It said the savings due to reduced cash management would balance out the cost of processing electronic transactions. The official said while several public utilities such as state-owned telephone and power utilities accept e-payments by citizens, most departments don’t have the basic application or technology to accept payments through the internet. In order to save effort and expenditure by each ministry, DeitY is developing a common application with basic payments features that can be adopted initially.
Elets The Banking and Finance Post Magazine has carved out a niche for itself in the crowded market with exclusive & unique content. Get in-depth insights on trend-setting innovations & transformation in the BFSI sector. Best offers for Print + Digital issues! Subscribe here➔ www.eletsonline.com/subscription/
