New Delhi: The Centre on Wednesday made it clear that it believes digital economy will clean up the system, weed out corruption and black money.
As part of this premise, the government announced that it will soon launch an Aadhaar-based payment system to promote digital transactions for people living in the hinterlands.
Finance minister Arun Jaitley told Parliament that: “A merchant-enabled Aadhaar payment system will be launched shortly. This will specially be beneficial to those who do not have debit cards, mobile wallets or mobile phones.”
Reminding that promotion of digital economy is an integral part of the government's strategy, the finance minister said that it has a transformational impact in terms of greater formalisation of the economy and mainstreaming the financial system into the Budget system.
“This, in turn, is expected to energise private investment in the country through lower cost of credit. India is now at the cusp of a massive digital revolution. A shift to digital platform has huge benefits to the common man,” Mr Jaitley said.
He said that the BHIM app will unleash the power of mobile phones for making digital payments and financial inclusion.
Mr Jaitley said, “125 lakh people have adopted BHIM app so far; the Government will launch two new schemes to promote the use of BHIM. These are referral bonus schemes for individuals and cashless schemes for merchants.”
He said that the government's earlier initiatives to promote financial inclusion and JAM trinity were precursors to the current push for digital transactions.
Already, there is evidence for increased digital transactions, Jaitley said. Further, a mission will be set up with a target of over 2,500 crore digital transactions for 2017-18 through UPI, USSD, Aadhaar Pay, IMPS and debit cards. Also, banks have targeted to introduce additional 10 lakh point-of-sale terminal by March 2017, he said.
“Banks will be encouraged to introduce 20 lakh Aadhaar based POS by September 2017,” he said.
The finance minister said an increased digital transaction will encourage SMSEs to access formal credit.
“The government will encourage SIDBI to refinance credit institutions which provide unsecured loans at reasonable rates to borrowers based on their transaction history,” the finance minister said.
Going Digital
- Aadhaar-enabled payment system for merchants shortly.
- Payment Regulatory Board to be set up within RBI to regulate digital payments.
- Computer Emergency Response Team proposed to check cyber frauds.
- Service charges on e-tickets booked via IRCTC waived.
- High-speed broadband connectivity under DigiGaon.
- 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.
- A proposal to mandate all government receipts through digital means, beyond a prescribed limit, is under consideration.
- Banks have been set a target to introduce additional 10 lakh new POS terminals by March 2017. They will be encouraged to introduce 20 lakh Aadhaar-based POS by September 2017.
Force to fight cyber criminals
Amid the government’s push on digital transactions, finance minister Arun Jaitley on Wednesday announced setting up of a Computer Emergency Response Team to strengthen security of the financial sector amid increasing incidents of cyber frauds.
“Cyber security is critical for safeguarding the integrity and stability of our financial sector. A Computer Emergency Response Team for Financial Sector (CERT-Fin) will be established,” Mr Jaitley said in his Budget Speech.
The entity, he said, will work in close coordination with all financial sector regulators and other stakeholders.
Last year, more than 32 lakh debit cards of various banks were compromised. It was one of the biggest cyber frauds related to banks in India. Post demonetisation, promotion of a digital economy is an integral part of government’s strategy to clean the system and weed out corruption and black money.
The finance minister also announced that a Bill relating to resolution of financial firms will be introduced in the ongoing Budget session of Parliament.
