Cashless transactions major benefits announced by Arun Jaitley
One month after government announced demonetisation of high-value currency notes; Union Finance Minister Arun Jaitley announced 11 big measures that the centre has taken to expedite the “revolutionary move” for making cashless transactions in India. Cashless transactions will help to keep track of transactions to minimize the corruption.
Overview of announcements made by Arun Jaitley on cashless transactions
1. 0.75 % discount on fuel
The Government Petroleum PSUs shall give incentive by offering a discount at the rate of 0.75 percent; of the sale price to consumers on purchase of petrol or diesel if payment is made through digital means.
2. POS machines in villages
To expand digital payment infrastructure in rural areas; the Government through NABARD will extend financial support to eligible banks for deployment of 2 POS (Point Of Sale Terminal) devices; each in 1 lakh villages with population of less than 10,000. These POS machines are intended to be deployed at primary cooperative societies/milk societies/agricultural input dealers to facilitate agri-related transactions through digital means. This will benefit farmers of one lakh village covering a total population of nearly 75 crore who will have facility to transact cashlessly in their villages for their agricultural needs.
3. Rupay Kisan Cards for farmers
The Government through NABARD will also support Rural Regional Banks and Cooperative Banks to issue “Rupay Kisan Cards” to 4.32 crore Kisan Credit Card holders; to enable them to make digital transactions at POS machines/Micro ATMs.
4. Buy railway tickets online
Railway through its sub urban railway network shall provide incentive by way of discount upto 0.5 percent to customers for monthly or seasonal tickets from January 1, 2017; if payment is made through digital means. Nearly 80 lakh passengers use seasonal or monthly ticket on suburban railways, largely in cash, spending worth nearly Rs 2,000 crore per year.
5. Free accidental insurance
All railway passengers buying online ticket shall be given free accidental insurance cover of upto Rs 10 lakh. Nearly 14 lakh railway passengers are buying tickets everyday out of which 58% tickets are bought online; through digital means.
6. Incentives for railway passengers
For paid services e.g. catering, accommodation, retiring rooms etc. being offered by railways through its affiliated entities/corporations; to the passengers, it will provide a discount of 5 per cent for payment of these services through digital means. All the passengers traveling on railways availing these services may avail the benefit.
7. Discount on policies sold online
Public sector insurance companies will provide incentive, by way of discount or credit; upto 10 percent of the premium in general insurance policies and 8 percent in new life policies of Life Insurance Corporation sold through the customer portals, in case payment is made through digital means.
8. No transaction fee on digital payments
Government departments and PSUs will ensure that; transactions fee/MDR charges associated with payment through digital means shall not be passed on to the consumers; and all such expenses shall be borne by them. State Governments are being advised that the State Governments and its organizations; should also consider to absorb the transaction fee/MDR charges related to digital payment to them and consumer should not be asked to bear it.
9. Benefits for merchants, traders
Public sector banks are advised that merchant should not be required to pay more than Rs 100 per month as monthly rental; for PoS terminals/Micro ATMs/mobile POS from the merchants to bring small merchant on board; the digital payment eco system. Nearly 6.5 lakh machines by Public Sector Banks have been issued to merchants; who will be benefitted by the lower rentals and promote digital transactions.
10. No charge on cashless payment less than 2K
No service tax will be charged on digital transaction charges/MDR for transactions upto Rs.2000.
11. 10% discount on card payments
For the payment of toll at Toll Plazas on National Highways using RFID card and Fast Tags; a discount of 10 percent will be available to users in the year 2016-17.