The poorest of poor will be eligible for rewards by using USSD, (the Unstructured Supplementary Service Data) System that is applicable to ordinary GSM mobile phones. People in village and rural areas can participate in this scheme through Aadhaar Enabled Payment System (AEPS). The scheme will become operational with the first draw on 25th December, 2016 (as a Christmas gift to the nation) leading up to a Mega Draw on Babasaheb Ambedkar Jayanti on 14th April 2017.
The Lucky Grahak Yojana for Consumers provides a daily reward of Rs 1000 to be given to 15,000 lucky consumers for a period of 100 days; and weekly prizes of Rs 1 lakh, Rs 10,000 and Rs. 5000 for Consumers who use the alternate modes of digital Payments. This will include all forms of transactions viz. UPI (Unified Payment Interface), USSD, AEPS and RuPay Cards, but will for the time being exclude transactions through Private Credit Cards and Digital Wallets. The Digi-Dhan Vyapar Yojana for Merchants provides Prizes for Merchantsfor all digital transactions conducted at Merchant Establishments and weekly prizes of Rs. 50,000, Rs 5,000 and Rs. 2,500.
There will be a Mega Draw on 14th of April – Ambedkar Jayanti. This will give three Mega Prizes for consumers worth Rs 1 crore, Rs 50 lakh, Rs 25 lakh for digital transactions between 8th November, 2016 and 13th April, 2017 to be announced on 14th April, 2017. For merchants too, there will be three Mega Prizes worth Rs 50 lakhs, Rs 25 lakh, Rs 12 lakh for digital transactions from 8thNovember, 2016 to 13th April, 2017 to be announced on 14th April, 2017.
The National Payment Corporation of India (NPCI), a not for profit company, which has the mandate to guide India towards a cashless society, is the implementing agency for the schemes. The NPCI has been directed to ensure a technical and security audit of the same to ensure that the technical integrity of the process is maintained. The Government shall incur an estimated expenditure of Rs 340 crores on the first phase of the scheme (up to 14th April, 2017).
The Centre has approved a slew of initiatives in February 2016 to encourage digital payments and a transition to less-cash economy in a strategic manner. Prime Minister Narendra Modi had highlighted these measures in his Man Ki Baat address in May 2016. Urging people to adopt cashless transactions, he said “If we learn and adapt ourselves to use cashless transactions, then we will not require notes. Under-hand dealings will stop; the influence of black money will be reduced. So I appeal to my countrymen, that we should at least make a beginning. Once we start, we will move ahead with great ease. Twenty years ago who would have thought that so many mobiles would be in our hands. Slowly we cultivated a habit and now we can’t do without those. Maybe this cashless society assumes a similar form. But the sooner this happens, the better it will be.”
Towards this end, the Government had launched a major drive for financial inclusion in terms of opening Jan Dhan accounts, giving a statutory basis for Aadhaar, implementation of Directs Benefits Transfer, introduction of RuPay Cards and Voluntary Disclosure Scheme for unaccounted money. Demonetization of 500 and 1000 Rs. notes on 8th November was another important milestone in this endeavour. Following demonetization, there has been a spurt in the digital payments across the country and both the volume and amount of money transacted through digital methods saw seen manifold increase since 9th November.
Yet, as on date, nearly 95 per cent of India’s personal consumption expenditure transactions are cash-based giving rise to a very large informal economy, limiting the ability of State to levy and raise taxes. The daily Ru-Pay Cards transactions in the country have risen from 3.85 lakh on 8th November to 16 lakh on 7 December; the e-Wallets transactions have increased from 17 lakhs to 63 lakhs; the UPI transactions from 3721 to 48238; the USSD from 97 to 1263 and PoS (Point of Sale) transactions from 50.2 lakh to 98.1 lakh.
To further accelerate the surge in digital transactions, the Government announced on 8th December an attractive package to promote the use of cashless payments through various concessions like a discount at the rate of 0.75 per cent of the sale price to consumers on purchase of petrol or diesel, if payment is made through digital means. To expand the digital payment infrastructure in rural areas, the Central Government through NABARD decided to extend financial support to eligible banks for deployment of two PoS devices each in one Lakh villages with population of less than 10,000. These PoS machines are intended to be deployed at primary cooperative societies, milk societies and agricultural input dealers to facilitate agri-related transactions through digital means and serve 75 crore population.
No service tax will be charged on digital transaction charges for transactions upto Rs.2000 per transaction. Railway through its sub urban railway network shall provide incentive by way of discount upto 0.5% to customers for monthly or seasonal tickets from January 1, 2017, if payment is made through digital means. Government has waived service tax charged while making payments through credit card, debit card, charge card or any other payment card; limiting the waiver to payments up to Rs. 2,000 in a single transaction
On 6th December, the Government, as part of the plan to expand the digital payments eco-system and facilitate the move towards cashless transactions, decided that an additional one million new PoS terminals should be installed by 31st March 2017. The Ministry of Labour & Employment and States’ Administration organized 2,73,919 camps to open 24.54 lakh bank accounts for unorganized workers.
Recommending a medium term strategy to promote the growth of digital payments, the Committee on Digital Payments constituted by the Ministry of Finance on 9th December submitted its Final Report to the Finance Minister and wanted the benefits to cover the financially and socially excluded groups.
Explaining the Government policy before the Finance Ministry’s Parliamentary Consultative Committee meet on 15th December, Finance Minister Arun Jaitley said that digital transactions were a parallel mechanism, not a substitute, for cash transactions and cashless economy was actually a less cash economy, as no economy could be fully cashless. The Finance Minister said that the Government was trying to encourage digitization as much as possible because an excessive cash economy had its own social and economic costs and consequences. The Government incentives to people had evoked a positive response to shift to digital mode of payment. Cyber security measures, he said, were being taken by the banks under RBI supervision.
*Deepak Razdan is a senior journalist and presently Editorial Consultant with The Statesman, New Delhi.