Lok Sabha Question No. 142 (STARRED), answered on 2016-11-25
Subject: Digital Payment Systems
Ministry: FINANCE
Asked by: PRALHAD VENKATESH JOSHI

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## GS\ERN}IIEN]  DF \ND\A MINISTRY  OF FINANCE OEPARTMENT  OF ECONOMIC AFFAIRS

## LOK SABHA ST ARREO NO.142 TO BE ANSWERED ON 25TH NOVEMBER. 2016/27TH KARTIKA. SAKA. 1938

## DIGITAL PA ENT SYSTEMS

I42'. SHRI PRALHAD JOSHI:

## OUESTION

## Will the Minister  of FINANCE be pleased (o  state:

- a) whelher the Government has taken note of various/mode of payments made for  transaclions namely cash, cheque, digital  etc., by the citizens in the counlry and if so, the details  thereof;
- c) lhe mechanism  put into place for effeclive implementation  of  the system/proiect;  and
- b) whether the Government proposes  to increase the digital payment mode and also launch a new initiative in partnership wilh the United States Agency for lnlernational Development  (USAID)  to scale digital payments in lndia and if so, the details  thereof  along with the benefits  ofthe  said initiative;
- d) whether funds have been committed in the recent past in implementation of digital transaction  and if so, details thereofduring  last two years  and the current yeat2

## ANSWER

MINISTER  OF FINANCE (SHRI  ARUN JAITLEY)

- (a) to (d): A stalement is laid on the Table of the House

## ment d re Lok ha Sta 25.1 l6 rdin ti 142. lPa en tem

- (a): Government is aware that most of the transactions in lndia are cash based. A study  repo( on the 'The  cost of cash in rndia' conducted  by The Fletcher  schoor. Tufts  university in collaboration  with National  lnstiiute for Bank Management,  pune, in 2014,  indicates that 87% of all transactions  in lndia were cash based.  Further, of the non-cash instruments  used,  cheques continue to be the dominant  mode in retail payments.
- (b)1o  (d): To encourage  cashless  transactions  and promote  the use oi cards and digital  means in transactions,  Government  has taken various steps. This move is aimed  at reducing  cash transactions  thereby reducing  the risks and costs of handling cash at the individual lev€|,  improving  the ease of conducting transactons,  reducing tax avoidance,  reducing  the cost of managing  cash in thl economy,  building a kansilions  history  to enabre improved credit iccess  and financiar incrusion  and reducing the impact of counterfeit  money.

.. .Government  has adopted  multi-pronged  approach to encourage  payment through  cards/digital  means which inter\_alia includes promoling and adopting several measures for card/digital  transactions,  creating acceftance  infrastruclure, encouraging  mobile banking/payment  channers  and creating  awareness, framing necessary  guidelines  to ensure  that merchant payments  are inieroperable  across  the broad speclrum of payments  and setflemenl  systems,  framing new guidelines  or Ievising existing guidelines  to aflow  pos/Mobile  pos  terminalsln  Tier Ir and below towns and rural areas, etc. With  a view to implementing the above scheme,  a lask Force and a Committee  have been constituted  to review  the Framework  related to Digital payment  system  in the country and to recommend appropriate  measures for encouraging  digital payments.

. . A dedicated fund under Depositor Education and Awareness  Fund (DEAF) is in place  for expanding  acceptance  infrastructure  and conducting  awareness campatgns  amongst public for a cash less society.

Further,  a Memorandum  of Underslanding  (MoU)  regarding  a partnership  to support  financial  inclusion  through expanded payments  acceptaice  networks has been signed on 04.1'1.2015 between  the Department  of Economic  Affairs and United States Agency for lnternational  Development  (USAID). The objectives  of this partnership  are expanding  the acceptance  of digiial payments, promoting interoperable payment  solutions, building  consumer -nfid"n". l, digital  payments, coordinating  with rerevant stake-horders  at the nationar, state and iocar revers as needed to maximise the impact  of partnership  activities, and facilitating  coordination with other relevant agencies.