A month after the Indian government's demonetisation move, it unveiled a list of incentives last week to promote cashless payments for petrol, diesel, insurance policies, toll and railway travel, etc. Finance Minister Arun Jaitley announced 11 measures at a time when the opposition observed a "black day" to protest hardships caused by demonetisation.
The move aims to step up the use of digital gateways, service tax charged on digital transaction charges and scrap merchant discount rates up to Rs 2,000 per transaction. "State-run fuel companies will offer a discount of 0.75 per cent to consumers when they buy petrol and diesel using debit or credit cards and other digital methods. This means that if you spend Rs 4,000 to buy petrol and diesel in a month, you can save Rs 30 and reduce the outgo to Rs 3,970 by swiping your debit and credit cards or use any other digital payment system. The incentive scheme has the potential of shifting at least 30 per cent more customers to digital means which will further reduce the cash requirement of nearly £20 billion per year at petrol pumps," Jaitley said at a news conference.
He said nearly 45 million customers who buy petrol or diesel at petrol pumps per day can avail the incentive. The estimate is that petrol and diesel worth £180 million is sold per day, of which, nearly 20 per cent is paid for through digital means. This increased by 40 per cent in November, and cash transaction of £36 million a day shifted to cashless methods. To promote cashless transactions as well as in-built cost in a democratic set-up, the FM said the government was promoting payment by credit, debit cards and e-wallets. "Dealing with cash has its own economic costs, which is why the government is promoting payments by credit cards, debit cards and e-wallets. Petrol and diesel will get cheaper for those who choose digital modes of transactions. They will get a discount of 0.75 per cent on every transaction they make at various petrol pumps."
For those who buy online tickets for rail travel, there will be a free accident insurance cover of up to Rs 1000,000. This facility will not be available to those who buy tickets at ticket counters and is currently limited to a few trains. Jaitley said nearly 1400,000 railway passengers buy tickets everyday of which 58 per cent are bought online through digital means. It is expected that another 20 per cent of passengers may shift to digital payment methods.
"Hence, nearly 1100,000 passengers per day will be covered under the accidental insurance scheme," Jaitley said. Those buying monthly and season tickets through digital methods for travel in suburban railway networks will get a discount of 0.5 per cent from January 1. For services like catering, accommodation, and booking retiring rooms offered by railways and affiliated entities, a discount of 5 per cent would be available for those paying digitally. This facility is available to all passengers.
