Here Are The Multiple Incentives You Can Avail By Going Cashless

New Delhi: As India moves towards a digital economy with its cashless mantra, several initiatives are being undertaken by the Union Government, as well as state governments to encourage and bring more people into the ambit of digital transactions. The pulling out of 500 and 1000 rupee notes from circulation in November 2016 further fueled the need to conduct transactions digitally. Following demonetisation, in a bid to encourage people to conduct digital transactions, the Union Government decided to announce a number of incentives for people conducting online transactions.

A major initiative announced by the Centre, right after demonetisation was a discount of 0.75 percent when purchasing petrol from any Central Government Petroleum PSU, if the payment was made through credit/debit card or using mobile wallets. Before November 2016, it was estimated that only 20 per cent of daily petrol sales worth Rs. 1,800 crores were being paid digitally. By the end of December 2016, the percentage had doubled to 40 per cent.

One of the biggest hindrances in turning to a cashless economy has been low rural penetration of internet, Point of Sale (PoS) machines and mobile/internet banking. To expand digital payment infrastructure in villages, the Union Government, via NABARD ((full form alongwith short), will deploy two POS machines in 1 lakh villages, having population of less than 10,000. Public Sector Banks have also been asked by the Union Government not to charge more than Rs 100 as monthly rental for PoS terminals/Micro ATMs/mobile so that smaller merchants are encouraged to adopt digital payment methods.

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Indian Railways, one of the biggest surface transport operations, announced a range of incentives for passengers, encouraging them to use digital methods of payment instead of cash. From January 2017, the Railways announced a discount of 0.5 per cent on monthly or seasonal tickets which are booked using credit/debit cards or netbanking. For long distance travelling, passengers buying railway tickets online are given free accidental insurance cover worth Rs 10 lakh. For paid services, such as catering and availing retiring rooms, Railways is offering a 5 per cent discount if paid by digital means. The Railways are estimating a shift of 20 per cent of the booking population, or nearly 11 lakh people, towards digital payment.

The Union Government is also extending its cashless benefits to the insurance sector. Public Sector Insurance companies such as Life Insurance Corporation of India, New India Assurance, United India Insurance etc. give a discount of up to 10 per cent in premiums for general insurance policies and 8 per cent for life insurance policies. The Union Government has also enabled card payments at toll plazas in National Highways, offering a discount of 10 per cent for users.

Following the Central Government's footsteps, several state governments have also begun to provide incentives for people conducting digital transactions. To promote cashless transactions in the state, the Government of Haryana announced a rebate of 1 per cent on property tax, if the tax is paid digitally. Haryana also held a Digi Dhan Mela at Sonepat in January 2017, where merchants, shopkeepers and consumers were provided insights on going cashless.

The Government of Assam also announced a range of cashless measures, despite the government expecting to incur an annual loss of Rs 100 crore due to the implementation of these measures. The state government announced discounts on payments in government hospitals, purchase of petrol, cinema tickets, labour payments in tea gardens and government run educational institutes, when paid via cashless means. The government also waived off the 4 per cent entry tax levied on PoS machines, installation of ATMs and mobile Wi-Fi. Co-operative societies in villages will receive a cash award worth Rs 25,000 if a village is 100 per cent cashless and conducts all transactions digitally. Similar awards will be given to farmers who use digital payment methods to buy seeds and fertilisers.

Down south, Andhra Pradesh also announced a range of rewards for people going cashless, focusing more on the rural population and encouraging them to go cashless. Unemployed youth, students, self-help group members would be given a cashback incentive of Rs 15 for their first digital transaction and Rs 20 on their next five transactions within a month of their first transaction. Villages going completely cashless have also been rewarded, from Rs 10,000 to Rs 1,00,000 depending on the size of the village population.

"The aim of providing incentives is to encourage people to go cashless. Apart from helping people know about digital methods of payment, it is also important to encourage people with existing access to digital payment methods to use them more frequently. The various Central and state government incentives will bring more people under the cashless umbrella and allow them to become less dependent on cash transactions," said Angrup Bodh, Joint Secretary, NITI Aayog.

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