NEW DELHI: Feeling hassled about making a paltry payment of Rs 10 orRs 5 through net banking or a credit card for a government service? Fret not — such transactions can soon be done through mobile wallets such as Paytm and Mobikwik. The government is creating a framework for all financial payments — inter-ministerial, vendor transactions or small payments by citizens for government services — to be made electronically. This is part of a larger initiative by the Modi government for a cashless, or less cash, economy.
The Department of Electronics and IT (DeitY) is spearheading the project, which is on its way to become a major leg of the government’s marquee Digital India campaign that is aimed at all-round digitisation in the country. Currently, most government payments and receipts are made by cash or cheque, said a senior official aware of the project called ‘epayment’. “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,” said the official.
RTGS is a real-time fund transfer system between banks, while DBT refers to direct benefit transfer, a scheme to deposit subsidy in the bank accounts of beneficiaries. The target is to ensure that every department gives out some kind of an e-receipt by December 2016. “Even mobile wallets can be considered for small payments,” the person added. A report of a Task Force on Aadhaar-Enabled Unified Payment Infrastructure released in 2012 said that studies have estimated that the cost of cash transactions is equivalent to 5-7% of GDP and this can be reduced by onethird through the use of retail electronic payments.
“Initially, a lesscash approach needs to be followed rather than going for a cashless approach,” the report said. While the government’s overall subsidy burden exceeds Rs 3 lakh crore each year, remittances are estimated to be an additional Rs 1 lakh crore, the report said. Though there are no estimates of the extent of cash circulating within the government machinery, the figure is expected to be a high percentage of the GDP.
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 epayments 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.