Digital Payment Committee Recommendation
Create a fund from savings generated from cash-less transactions: In the upcoming Union Budget 2017-18, a new Digital Payments Incentive Fund should be created, resourced from the savings generated by the Central Government from the movement towards less cash.
a) This may be called DIPAYAN or Digital Payments Action Network, also meaning light of a lamp. Using the trinity of JAM (Jan Dhan, Adhaar, Mobile) it will link financial inclusion with social protection, contributing to improved Social and Financial Security and Inclusion of vulnerable groups/ communities. This fund could be used to target public education about digital payments, incentivise higher usage of digital payments among socially and financially excluded, and help improve equitable outreach to women through women’s self-help groups, MGNREGA, outreach through women teachers, women ICDS and NHM functionaries, digital coupons in government co-operative store or fair price shops, extending additional seed capital to women’s self help groups, priority digital cards for skill development etc.
b) The Government should set in place a mechanism, both at national and state level, to regularly track the cost of handling cash and the cost of transitioning into digital payments. Accordingly, it should regularly quantify the savings that will accrue by fully transitioning into digital payments and consider providing subsidy for such transitioning accordingly.
c) It would be in existence over the medium term, for a period of 3 years. The Fund would be used to –
i. Promote public education and acceptance of digital payments, as well as changing expenditure related habits.
ii. This could be by incentivising extension and greater usage of Jan Dhan Yojana Accounts for digital payments, above certain threshold levels, by more vulnerable communities/ individuals. These would include those living below the poverty line, SC, ST, minorities, people with disabilities, people living in remote areas with no banking access, areas with connectivity problems, areas affected by natural calamities etc.
iii. Government payments and receipts: An incentive in the form of cash back or a discount on price, funded by the above fund may be introduced for payment of government services and public utilities through digital means.
iv. Support POS based acceptance in certain sectors. The Government may evaluate the feasibility of supporting growth of this infrastructure for promoting digital payments in sectors like health services.
v. Different states are at different threshold levels of digital payments, with a differing spread and mix of vulnerable groups. The overall monitorable target should be specified at national level and State level.
vi. In addition, the fund should be used for funding innovative solutions to adopt digital payments. This should be available to all market participants.
[ read Complete Report of Committee Report of Committee on Digital Payments (Constituted by Govt of India ) ]