Speaking on the first 30 days of the demonetisation of the Rs. 500 and Rs. 1000 notes, Finance Minister Arun Jaitley made a number of announcements to encourage the adoption of cashless payments, from discounts for non-cash payments, to the removal of fees and charges on these digital methods of payment.
Amongst other things, the minister stated that it will expedite the digital switchover, with two point of sale (POS) machines given to any village with 10,000 people, and 100,000 villages have been selected.
Rural banks and cooperative banks will provide farmers with card facilities to use digital payments, he added.
Other incentives include discounts on purchase of petrol and diesel – people who buy without using cash will get a 0.75 percent discount, and a 5 percent discount on digital payments for railway facilities like catering and retiring rooms, he said. People buying monthly seasonal tickets for suburban railways will also get a 0.5 percent discount for digital payments. What’s more, people who use online payments for railway tickets will also get free accident claim insurance cover of Rs. 10 lakh, the Finance Minister said.
“PSUs are also getting POS terminals and micro-ATMs and these also become a path to digital payments,” Jaitley said. These will be given out at a capped rate of Rs. 100 per month, he promised, pointing out that 650,000 machines have already been provided by PSU banks, and all existing machines will also be entitled to this cheap rent.
All transactions under Rs. 2,000 through digital methods will also not attract service tax, or transaction charges, as Parliament has already been informed, Jaitley added, and finally, he also said that toll plazas on national highways that use fast tags and RFID cards will also offer a 10 percent discount to users who buy the cards using digital payment methods.
He also added that those availing insurance policies from public sector insurance companies will get a discount of 10 percent for general insurance, and 8 percent for life insurance, if they make the payments through digital means.
These decisions will go into action right away, he added, with no planned end-date at present. “We were using, as of November 8, an excessive amount of cash,” he said, “and there is a cost of transacting in cash. And that cost has to be borne by the economy, and also the political system. In the long run, we are using this also as an opportunity to move towards digitisation.”
The minister said that these policies will help make India a “less-cash” economy.