Source: Business Standard, Dec 03, 2016
“Cash crunch or no cash crunch, the digital payment mode is going to be the new normal,” was the message that was being conveyed to people of both the states by the respective governments. In the two states, the districts’ administrations were asked to engage with people and businesses to go for digital payment transactions without waiting for cash.
Cashless transactions have already been made mandatory in government market yards in Telangana while the AP government has been implementing cashless transactions system across all the fair-price shops in five districts.
AP Chief Minister N Chandrababu Naidu, now also the convener of a national-level committee that was set up to suggest ways to achieve quick adoption of cashless transactions by people, declared yesterday that he would make AP as a role model to other states.
AP government has announced monetary incentives to university students and unemployed youth to train people in digital payments using mobile phones and other digital tools in towns and rural areas. Workshops and seminars are being also planned on a massive scale to sensitise people on the cashless transaction in AP.
Telangana government too announced a slew of measures to push cashless transactions across the state. Chief Minister K Chandrasekhara Rao recently announced that people and businesses in Siddipet assembly constituency in his home district of Medak would be motivated to go 100% cashless very soon. A similar digital payments targets would be extended to other parts of Telangana based on the experience gained in Siddipet.
Every transaction above the value of Rs 500 should be done through digital payment mode in the state going forward, according to Rao.
Since the last couple of weeks, the state government has deployed teams to help open bank accounts for the contract workers and daily wage labourers while asking their employers to transfer wage amount to their bank accounts.
In Hyderabad, the finance department officials have started conducting camps to government staff on usage of e-wallets and other available methods to make digital payments.
Ensuring adequate funds to the welfare programmes would be big a challenge if the ongoing impact of demonetisation on the state finances continues to remain for a longer period.
Chief Minister Rao even stated that only those states that would quickly switch to the cashless transactions regime would gain under the present circumstances.
While the immediate priority was to restore the consumption-led spending as it has been the mainstay of state’s own revenues, the political leadership of the two governments also believe that the increase in digital transactions would eventually help expand the tax base in the long run.The undivided AP was an early adopter of technology in offering citizen services, including utility payment services through on-line kiosks in the last decade. This legacy is expected to make the governments’ task somewhat easier in convincing people to adopt digital transactions, according to the officials.