Niti Aayog announces 2 incentive schemes for digital payments

The government on Thursday announced two incentive schemes of daily, weekly and mega cash prizes to consumers and merchants, involving a total expenditure of Rs340 crore, to promote digital payments post demonetisation.

The schemes - Lucky Grahak Yojana and Digi Dhan Vyapar Yojana - will be open from 25 December till 13 April 2017.

Announcing the schemes, Niti Aayog CEO Amitabh Kant said both the schemes will be limited to small transactions between Rs50 and Rs3,000, to be more inclusive.

Kant said the first draw will happen on 25 December, which will be a 'Christmas Gift' to the country, and the mega draw will on 14 April, the birth anniversary of B R Ambedkar.

National Payment Corporation of India (NPCI) will announce 15,000 winners of Rs1,000 each for the next 100 days, starting 25 December. There will be 7,000 weekly awards each for consumers and merchants.

The primary aim of these schemes is to incentivise digital transactions so that electronic payments are adopted by all sections of the society, especially the poor and the middle class. It has been designed keeping in mind all sections of the society and their usage patterns.

For instance, the poorest of poor will be eligible for rewards by using USSD [unstructured supplementary service data], a GSM communication technology that is used to send text between a mobile phone and an application program in the network. People in villages and rural areas can participate in this scheme through 'Adhaar-enabled payment system' [AEPS]. The scheme will comprise two major components, one for the consumers and the other for the merchants:

Lucky Grahak Yojana [Consumers]:

• Daily reward of Rs1,000 to be given to 15,000 lucky consumers for a period of 100 days;
• Weekly prizes worth Rs1 lakh, Rs10,000 and Rs5,000 for consumers who use the alternate modes of digital Payments

This will include all forms of transactions - 'unified payments interface' [UPI], USSD, AEPS and RuPay Cards but will for the time being exclude transactions through private credit cards and digital wallets.

Digi-Dhan Vyapar Yojana [Merchants]:

• Prizes for merchants for all digital transactions conducted at Merchant establishments;
• Weekly prizes worth Rs50,000, Rs5,000 and Rs2,500.

 Mega Draw on 14 of April – Ambedkar Jayanti

• Three mega prizes for consumers worth Rs1 crore, Rs50 lakh and Rs25 lakh for digital transactions between 8 November 2016 and 13 April 2017 to be announced on 14 April 2017;
• Three mega prizes for merchants worth Rs50 lakh, Rs25 lakh and Rs12 lakh for digital transactions between 8 November 2016 and 13 April 2017 to be announced on 14 April 2017.

To ensure that the focus of the scheme is on small transactions (entered into by common people), incentives shall be restricted to transactions within the range of Rs50 and Rs3,000. All transactions between consumers and merchants, consumers and government agencies and all AEPS transactions will be considered for the incentive scheme.

The winners will be identified through a random draw of the eligible transaction IDs (which are generated automatically as soon as the transaction is completed) by software to be especially developed by NPCI for this purpose. NPCI has been directed to ensure a technical and security audit of the same to ensure that the technical integrity of the process is maintained.

The estimated expenditure on the first phase of the scheme (up to 14 April 2017) is likely to be Rs340 crore. The government will simultaneously carry out a review for further implementation.

''India is transitioning at a rapid rate from a cash-user society to a cashless society. This is a historic moment in our nation's history when our nation is shedding old habits and rapidly adopting new means which shall propel us into a truly modern age, ''an official release pointed out.

Nearly 95 per cent of India's personal consumption expenditure transactions are cash-based giving rise to a very large informal economy limiting the ability of state to levy and raise taxes. The government of India had recently (8 December) announced a slew of measures to promote digital payments).

To increase overall transparency in the economy and to remove the pernicious influence of cash on the political and economic system, it is essential that we take a longer term view and bring in measures that would influence the behaviour of the consumers as well as merchants to shift to digital payment instruments.

It is now possible by leveraging technology to carry out business transactions digitally through mechanisms like UPI, USSD, RuPay cards and Aadhar enabled payment system.

In a country like India where 65 per cent of the population is below 35 years of age, whose IT prowess is well recognised and where even poor and illiterate people exercise their franchise through EVMs, this transformation toward digital economy is definitely possible, provided the citizens resolve to do so, the release pointed out.