Modi’s master plan to make Bharat a cashless economy

In a bid to drive the cashless economy in the country, the central government is considering making mandatory digital payments at points of consumer interface in all government and departments including railways and road transport corporations.

Government payments account for a huge percentage of overall transactions and hence PM Modi wants digital transactions to increase in order to reduce the country's dependence on cash.To achieve this the government is planning to come up with new initiatives. Here is a brief explainer

Online payments integrated with BHIM

All payment options of government and Public Sector Units will be integrated with with official payment modes such as BHIM and Bharat QR code. Bus, train and Metro ticket counters and licenced kiosks and shops will display the Bharat QR code and discounts will be offered for digital payments.

The government is also considering printing the Bharat QR code on all utility bills as a payment option and telecom operators will be told to ensure its prominent display at recharge outlets offering additional talk time for digital payment. Besides, it is planning to make RFID toll tags mandatory for all cars from October.

Big-ticket campaign

The government will on October 2 launch a big-ticket campaign concerted campaign on digital transactions involving all ministries, states and public sector units. The campaign will run till Republic Day (January 26). Ministries, states and PSUs will proactively publicise and promote digital payments.

Discount on digital payments

The government is also looking at further incentives to encourage the use of digital payment tools apart from strengthening the infrastructure for their acceptance. It came up with multiple incentives ranging from discounts on fuel, highway toll and railway tickets to cheaper insurance cover for those using digital payment modes. For the payment of toll at Toll Plazas on National Highways using RFID card/Fast Tags, a discount of 10% will be available to users in the year 2016-17.

Digital is still not the primary mode of payment. Lots of ideas are being discussed on how to reduce dependence on cash, but they are still to be finalised, an official told ET. The governments agressive move to further drive the economy towards cashless started out with demonetisation, and has been further backed by the release of their UPI-powered BHIM app and Aadhar-backed Aadhar Pay.