Lok Sabha Question No. 1773 (UNSTARRED), answered on 2018-07-27
Subject: Demonetisation and Digital Transactions
Ministry: FINANCE
Asked by: DIPSINH SHANKARSINH RATHOD, MOHANBHAI KALYANJIBHAI KUNDARIYA

## 1773: SHRI D.S, RATIIOD:

## SHRI KI]NDARIYA MOIIAN  BHAI KALYANJI BHAI:

Will the Minister of FINANCE  be pleased  to state:

- (a) whether  the demonetisation has given a boost to digital  transactions  in the country;
- (b) if so,  the  details thereof;
- (c) whether  this has also improved the Govemment receipts,  ifso, the details  thereof; and
- (d) the steps being taken  by the Govemment to improve the accessibility  and acceptance ofdigital  payments?

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI P. RADIIAKRISHNAN)

(a)  & (b): Yes, a significant  growth has been observed in digital  transactions  in the country post  demonetization p€riod.  Growth of Digital  Transactions  in terms ofvolume has increased to 214.31  crore  in May  2018  from  91.83 crore in Nov 2016.  Digital Transactions in terms of value has increased  to 179.83 lakl crore in May 2018 ftom 112.27  lakh crore. Growth of Digital Transaction since Novemb€r  2016  is at Annexure A-

(c): Net direct tax collections  for FY 2017- l8 amounted  to Rs. 10.03  lakh crore,  which is 18% higher than the collections  for 2016-17. The collections  for FY 2016-17 were also 14.5%  higher than the collections  for 2015-16.  On the other han4 the growth  rates in FY 2015-16 and FY 2014-15  were only 6.6%o and 9o/o, respectively.  The robust growth in direct tax rcvenue in the  year of demonetisation and the year after thal is indicative  of a positive impact  of demonetisation  on the level of tax compliance in the country.

There has also been remarkable  growh in the revenue flow fiom Advance Tax and Self-Assessment  Tax under Personal  Income Tax  @IT).  In FY 2017-18, PIT Advance Tax collections  increased by 23.4Yo and PIT Self-Assessment  Tax by 29.9olo over those  for 201G  I 7, corroborating the premise that demonetization  and the suhsequenl  follow-up ofbank  deposit data by the Income Tax Department had a sigrificant  irnpact on voluntary  tax payments.

(d): ln order to encourage  use of digital payments  in commercial  transactions,  the Govemment (vide Finance  Act-2017) has reduced  the rate of presumptive  income-tax  in respect of tumover  through  digital transactions from  8oZ to 6%0. A dedicated DigiDhan mission was set up with an aim to promote digital kansactions. Digital  payment App 'BHIM-Bharat Interface for Money'  was launched  on 30s December,2016.  The initiative taken by Govemment to encourage  digital transactions in the country arc at Annexure-B.

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## , GOVERNMENT  OF INDIA MINISTRY OF FINANCE

## DEPARTMENT  OF ECONOMIC AFFAIRS

## LOKSABHA UNSTARRED  QI,IESTION  NO. 1773

TO BE ANSWERED ON 27h July,2018/ SHRAVANA 5, 1940 (SAKA)

## Demonetisation and Disital  Transactions

## OUESTION

Annexure  A referred in reply to the Lok Sabha Unstarred  Question  1773 fior 27.07.2018

| Growth of Digital Transactions   | Growth of Digital Transactions   | Growth of Digital Transactions   |
|----------------------------------|----------------------------------|----------------------------------|
| Months                           | Volume                           | Value                            |
| Unit                             | In Crore                         | ln Lakh Crore                    |
| Nov'16                           | 91.83                            | 112.27                           |
| Dec'16                           | 132.93                           | t24.57                           |
| Jan'17                           | 125.61                           | I13.94                           |
| Feb'17                           | 111.37                           | 107.98                           |
| Ma117                            | 130.64                           | 172.6r                           |
| Apr 17                           | 159.7 4                          | t48.43                           |
| May'17                           | i 56.89                          | 151.45                           |
| June'17                          | ts3.02                           | 154.43                           |
| lull17                           | 156.71                           | 145.76                           |
| Aug'I7                           | 158.3 7                          | 151.15                           |
| Sep'17                           | 1 5 8.62                         | 169.20                           |
| Oct'I7                           | 169.10                           | 156.44                           |
| Nov'17                           | 174.64                           | 165.07                           |
| Dec'17                           | t94.03                           | 169.44                           |
| Jan'i8                           | 199.01                           | 182.04                           |
| Feb'18                           | 191.23                           | 152.16                           |
| Mar'l8                           | 199.74                           | 216.86                           |
| Ap/18                            | 208.26                           | 163.67                           |
| Mav'18                           | 214.31                           | t'19.83                          |

NOTE:  For month  of Jun'18 & Jul'18 RBI data not published,  hence  has not been  included.

Following  are the list ofmodes used for digital transaction  calculation  as above:

- I. NACH
3.  UPI
3. 2,  IMPS
4.  BHIM
6.  RuPay on POS
5.  USSD
7. RuPay on eCom 7.
8. AEPS 8.
9. BBPS 9.
10. NETC 10.
11. Debit Card (excluding  RuPay) I l.
12. Credit Card 12.
13. NEFT
14. Mobile Wallet
15. RTGS
16. t6. PPC
17. t7. Closed  Loop

## Annexure  B referred  in reply to the Lok Sabha Unstarred  Question  1173 for 27.07.2O18

## Initiative taken by Government  to encourage digital transactions in the country

## i) Erpansion  of payment acceptance infrastructure:

- ) As per the budget  announcement  for FY 2017-18,  Banks were allocated a target  to deploy  10 Lakh additional Point of Sales (PoS) terminals. Against this target, Banks installed  12.33 Lakh  new PoS terminal. Currently  a total  of 33.20 Lakh PoS (till May 2018) terminals  have been deployed in the country.  Ministry of Electronics and Information  Technolory (MeitY) has further allocated a target to deploy 20 Lakh additional  PoS terminals by the Banks  in FY 20 I 8- I 9.
- >  BHIM Aadhaar  Pay enables  citizens without smart phones to make digital  payments  by using biometric  authentication. Around  5.56 l^akh BHIM Aadhaar PoS have been deployed by the Banks till May  2018.
- >  Bharat  QR  4.0 with a provision  of accepting  QR  based paym€nt  payments  using  UPI was launched on 106 August 2017.  By 306 April 2018,26 Banks have been  made live on Bharat  QR  as acquirer and 38 Banks have been made  live on BHIM UPI PSP App. Till May 2018, Bharat  QR  was installed at 1 l 08 Lakh merchant  locations.

## ii) Incentive  Schemes

- F  MeitY vide gazette notification No 6(19)/2017-DPD-I  dated 276 December 2017 has notified the reimbursement  of Merchant Discount  Rate (MDR) charges on Debit cardsr'BHIM-LIPyBHIM Aadhaar Pay based transactions  of value less than Rs 2000 to the Banks for a p€riod  of two years starting from 1$ Jan 201E. The reimbursement of MDR  is aimed to improve the adoptiot! of digital payments  by merchants  specially the small and micro merchants.
- D 'BHIM Cashback Scheme for Individuals' has been launched to popularize payments through BHIIvI APP. The scheme have been modified and is operational till March  2019. Tho customer  on BHIM app can eam an incentive upto Rs I 50 on 1 0 unique ransactions  over the BHIM  app.
- F  The BHIM Aadhaar merchant incentive scheme has been reJaunched and the incentive  has been increased ftom 0.25Yo  to 0.5%. The scheme  is operational  l$ April 2018 till March 2019. In this scheme merchant  can earn an incentive up-to  Rs 2000 per month.
- F  To give impetus  to the deployment  ofBHIM Aadhaar PoS devices, Deparfirent  ofFinsncial  Services has launched  a scheme  to provide  an incentive of up-to  Rs I 800 to the Banks  on the procurement  of each  BHIM Aadhaar  poS.

## iii) Coordination with Banks

- ) Digital payment transaction  targets have been  allocated  to the  public and  private  sector  Banks for FY 2018- 19. Meity has set targets of30l3 Crore  digital payment  transactions.
- ) The perfonnance  of the Banks is arso monitored  and evaruated  by Meity though  a perforrnance scorecard and a Bank ranking system.

## i9 Advisorie to Mnistries/Departments

- D Gorernment of India has issued advisories to Cenfal Ministries/Departrnents  and StateyuTs  to improve payments acceptance infiastructue,  enable the citizens  to pay by a variety  ofdigital modes such as Internet  banking,  mobile banking,  and mobile applications  etc. including  use of BHIM, integrate on-line payment portals with BHIM,4JPVQR-code/Rupay  Card, printing  of  QR  code on bills, incentivisation  of digital  payments  and publicity  and creation of awareness  about digitsl pa).ments among citizens.

## v) Publicity Campaign

- F Ministry of Electronics  and Information Technolog,r has initiated  the publicity campaign through following  mediums  till now:
- l. Radio(WirelessMedia)
2.  Newspape(PrintMedia)
3.  Websit{DigitalMedia)

## vi) Monitoring, Analysis and Grievances

- ) In order to create a platform for accurate reporting,  monitoring and analysis of all digital  payment transactions being carried  out across the country,  GOI has developed a National Digital Payment Dashboard,  which  was launched by Hon'ble Minister  of Electronics and IT on 136 February,20l8.
- F In coordination  with Department  ofFinancial  Services,  ,  necessary  instructions  have been  issued  to on board all Banks,  Payment Banks and PPI (Pre Paid Instrument) Service  Providers in the National consumer Helpline  (NCH) platform  for becoming  as convergence partners. Accordingly, almost 56 banks and other  financial service  institutions  have been on boarded  into NCH Platform.  NPCI has also b€€n  integrated as a convergence  partner  in National  Consumer  Helpline (NCH) platform.  Thus  the NCH platform  is live aad receiving Digital  Palment  related  grievances.

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