From referral bonus and cash backs on digital transactions to incentives for online ticket bookings and a new AadhaarPay Application, Modi government is all determined to curb cash transactions and give India a digital push.
Priyanka Sahay and Harsimran Julka
In a big push to digital economy, Finance Minister Arun Jaitley in his Budget announced a plan to boost digital transactions by removing service tax on railway tickets booked via IRCTC portal, establishing a travel portal for Indian defence forces and launching Aadhaar Pay, a merchant app for Aadhaar-based payments and referral bonus on transactions and downloads of BHIM App.
He also removed duties on POS card readers iris scanners to promote digital authentication.
The announcements are likely to induce people to transact digitally as well as make BHIM and Aadhaar Pay apps worthy rivals to existing mobile wallets Paytm, Mobikwik and Freecharge.
According to the Finance Minister, digital economy will lead to larger transparency in the country. “A Tech India will energize various sector of the society, clean the country from black money and corruption,” he said.
More 10 million people have adopted BHIM, so far. About 111 crore people are already enrolled with Aadhaar scheme and about 250 million people possess smartphones, making the ecosystem ripe for a JAM (Jan Dhan, Aadhaar and Mobile) based economy.
Stressing on the importance of digital transactions, the government also announced a cap of Rs 3 lakh on all cash based transactions. They will now have to be done either digitally or via cheque.
Cashback and referrals on BHIM
The Government will launch two new schemes to promote the usage of BHIM namely a ‘Referral Bonus Scheme’ for individuals and a ‘Cashback Scheme’ for merchants. “AadharPay, a merchant version of Aadhaar-enabled payment system will be launched shortly for those without debit cards and mobile phones,” the FM said in his Budget Speech.
A mission will be set up with a target of 2,500 crore digital transactions for 2017-18 through UPI, USSD, Aadhar Pay, IMPS and debit cards.
Banks have targeted to introduce additional 10 lakh new PoS terminals by March 2017.
A Computer emergency response team will be established just for banks and financial sector.
“The formation of CERT for the financial sector is a testament. Due to the rise in number of digital transactions, CERT for this sector will certainly boost the cyber security stature and bring in more confidence amongst consumers to adopt digital transactions,” said Saket Modi, CEO & Co-founder, Lucideus.
Online travel ticketing gets a boost
A centralised defence travel system has now been developed through which travel tickets can be booked online by our soldiers and officers. A comprehensive web based interactive Pension Disbursement System for Defence Pensioners will be established.
Service charge on e-tickets booked through IRCTC has also been withdrawn.
The Modi government also plans to start a Payments Regulation Board under RBI which is likely to control all mobile wallets.
“It remains to be seen if the proposed setting up of Payments Regulation Board under RBI and amendments in the Payments and Settlement Act will bring about fundamental changes to accommodate the fast changing digital payments ecosystem in the country,” said Mr Rahul Gochhwal, co-founder, Trupay, the Digital Payment app based on UPI in his budget reaction.
BharatNet: Villages to get internet at cheaper price
The government also increased the allocation for BharatNet Project to Rs 10,000 crore in 2017-18.
The target is to ensure high speed broadband connectivity on optical fibre in more than 1,50,000 gram panchayats, with wifi hot spots and access to digital services at low tariffs.
A DigiGaon initiative will be launched to provide tele-medicine, education and skills through digital technology. The FM also lauded the efforts of demonetisation adding that it has strong long term benefits in terms of digitisation.Startups have welcomed the move to digitise India. "Incentivising UPI with new referral bonus and cashback schemes will accelerate the formation of Indian digital payments backbone. With remonetisation, people must be deterred to switch back to cash for their expenditures,” Ankit Singh, Co-Founder of payments app Mypoolin.