A month after the demonetisation move, Finance Minister Arun Jaitley on Thursday announced a slew of incentives to promote digital transactions to soften the impact on the common man.
Discounts ranging between 0.5 per cent and 10 per cent were announced to encourage digital transactions vis-à-vis physical currency for use of various services.
Simultaneously, the Chief Ministers’ Committee on Digital Payment, constituted by the Prime Minister and headed by Andhra Pradesh Chief Minister N Chandrababu Naidu, hopes to submit its interim report on digital currency in three days.
After meeting with bankers, Naidu said the focus was on making the delivery of low-denomination currency notes to people easy. He said that ₹500 currency notes will ‘adequately’ be made available by December 15.
Jaitley, while announcing the discounts, said, “The aim is to lower cash transactions in the economy as much as possible so that digital transactions emerge as a substitute.”
The incentives are mostly for services provided by Central public sector undertakings and the Railways. PSUs oil marketing companies will offer a discount of 0.75 per cent on petrol and diesel sales if transactions are done digitally.
Jaitley said that nearly 4.5 crore people buy petrol or diesel daily and transactions worth ₹360 crore/day had already gone cashless at fuel outlets in November.
This discount offer, according to Jaitley, has the potential to shift at least 30 per cent more people to the digital mode, which will further reduce the cash requirement of nearly ₹2 lakh crore per year at petrol pumps.
Insurance premiums For insurance policies, a discount or credit on the premium one pays will be offered for digital transactions.
“A discount of 10 per cent on the premium amount of general insurance policies and 8 per cent in new life policies of Life Insurance Corporation sold through the online customer portals, in case payment is made through digital means,” he said.
The Railways will also offer a discount of 0.5 per cent to customers opting for digital payments while purchasing monthly or seasonal tickets for suburban railway networks from January 1.
“This scheme will be launched with the Mumbai suburban railway network,” he said.
Further, railway passengers buying online tickets will be given a free accidental insurance cover of ₹10 lakh.
There will also be a 5 per cent discount on digital payment for services such as catering, accommodation, and retiring rooms offered by the Railways.
As more passengers shift to digital payments, the cash requirement may come down by ₹1,000 crore a year, a Finance Ministry statement said.