Centre to make e-payments for all contracts exceeding Rs5,000

Any payment above Rs5,000 to suppliers, contractors, grantee / loanee institutions, etc, by government departments will now be made through e-payment as part of the move towards complete digitisation of government payments.

The finance ministry has reviewed the existing limit of Rs10,000 prescribed for e-payment to suppliers, etc, and decided to lower the threshold to Rs5,000. This is the second time the government is revising the e-payment limit since August 2016.

Accordingly, all government ministries and departments have been directed to ensure with immediate effect that all payments above Rs5,000 to suppliers, contractors, grantee / loanee institutions, etc, are made by issue of payment advises only, a finance ministry release stated.

Meanwhile, the central government has been encouraging cashless / electronic transactions across the various ministries and departments. Government employees have been asked to take the lead and maximise the use of electronic modes of transactions instead of using cash

The central government ministries and departments have been crediting the salary and other payments for the majority of its employees electronically, direct into the designated bank accounts of the employees.

The government has requested all its ministries and departments to encourage their employees to make use of debit cards for personal related transactions instead of cash.

Ministries and departments have been asked to liaise with their accredited banks and set up special camps to facilitate issue of debit cards to employees. Similarly, attached  / subordinate offices, PSUs, autonomous bodies, etc, have also been asked to go cashless as far as possible.

Following the announcement of demonetisation of 500 and 1,000 rupee notes on 8 November, the government has been taking a slew of measures to promote digital transactions. 

While the finance ministry has instructed PSU and private banks to waive the transaction cost for all payments made through debit cards, the road transport ministry has asked vehicle manufacturers to provide a digital tag on all new cars for e-payments at toll plazas and checkposts.

Economic affairs secretary Shaktikanta Das had last month said all government offices have been asked to use only digital payment method for making payments to stakeholders, contractors and employees.

"Government organisations, PSUs and other government authorities have been advised to use only digital payment methods such as internet banking, unified payment interface, cards and Aadhaar-enabled payment systems to make payment to all stakeholders and their employees," he added.