Go digital, get discounts: FM

Sanjeev Sharma

Tribune News Service

New Delhi, December 8

With cash crunch persisting even a month after the November 8 demonetisation decision, the government today announced a slew of measures to incentivise cashless payments. 

The 11 measures listed include discounts on purchase of fuel, insurance policies and free railway accidental insurance cover for payments made using digital mode, including debit and credit cards, mobile phone applications and e-wallets.

Announcing the package, Finance Minister Arun Jaitley said following the cancellation of the legal tender character of old Rs 500 and Rs 1,000 notes, there had been a surge in digital transactions and the measures announced today would further accelerate the process.

“We were using excessive amount of cash and very limited amount of digital transactions till November 8,” Jaitley said, adding the cost of transacting in cash had to be borne by the economy.

Jaitley said public sector oil marketing companies would offer a discount at the rate of 0.75 per cent of the sale price on purchase of petrol and diesel if payment was made through digital means. The incentive scheme had the potential to shift at least 30 per cent more customers to digital means, which would further reduce the cash requirement of Rs 2 lakh crore per year at petrol stations, he said.

Nearly 4.5 crore customers buy petrol and diesel at fuel stations every day, resulting in estimated daily sale of Rs 1,800 crore. Nearly 20 per cent of the payments are made through digital means.

After demonetisation, digital payments have jumped to 40 per cent and cash transactions of Rs 360 crore per day have got shifted to cashless transaction methods.

For insurance policies, a discount of 10 per cent and 8 per cent, respectively, will be offered in case of general and life insurance for buying new policies or paying premium online through the customer portals of PSU insurance companies.

All railway passengers buying online ticket will get free accidental insurance cover of up to Rs 10 lakh. In addition, passengers using digital mode to pay for railway catering, accommodation, retiring room will get 5 per cent discount.

Nearly 14 lakh railway passengers buy tickets every day, out of which 58 per cent are bought online. It is expected another 20 per cent passengers may shift to digital payment methods of buying railway tickets. Nearly 11 lakh passengers per day will be covered under the accidental insurance scheme. 

For payment at toll plazas on national highways using RFID card/Fast Tags, a discount of 10 per cent will be available to users in 2016-17.

To expand digital payment infrastructure in the rural areas, the Centre through NABARD will extend financial support to eligible banks for deployment of 2 point of sales (POS) devices each in 1 lakh villages with population of less than 10,000.

Jaitley said it would benefit farmers of one lakh villages covering nearly 75 crore people. The government will also support rural regional banks and cooperative banks to issue “Rupay Kisan Cards”.