Centre to rank states on the basis of digital transactions – Economic Times
NEW DELHI: The Centre will soon rank states on a digital transaction index as part of its big push to make India a less-cash economy.
Government think tank Niti Aayog has begun the exercisie by reaching out to states to collate data, which will help it compile the first of its kind index. States will be ranked on the basis of this index.
The government has been promoting digital transactions since November 8 when it announced demonetisation of old Rs 500 and Rs 1,000 notes. The official, who spoke on the condition of anonymity, said the Prime Minister’s Office has supported the idea. Prime Minister Narendra Modi is the chairperson of Niti Aayog.
“The first ranking of states on the basis of digital transactions will be out in few months,” the official said.
The digital transaction index is likely to be based on three parameters — total transactions in a state, proportion of cash and digital transactions, and the extent of penetration and usage of different modes of digital payments.
The government has identified five digital payment systems with the aim to make them accessible and user-friendly.
These include unified payments interface (UPI), digital or e-wallets, prepaid debit or credit cards that can be used at ATMs and point of sales (PoS) machines, Aadhaar-enabled payment systems (AEPS), and unstructured supplementary service data (USSD).
Besides, it has announced cash awards of up to `1 crore and `50 lakh for consumers and merchants who use digital modes of payments, an attempt to bring more and more people on to the digital platform and thus making transactions more transparent.
According to the government, there has been a spurt in digital payments across the country and the volume as well as the amount of money transacted through digital means has jumped manifold since the launch of the demonetisation drive.
Digital transactions through the Rupay card have jumped 316% since November 9, transactions through e-wallets have soared 271%, UPI by 119%, USSP by 1202% and through PoS machines by 95%.
The Aayog has developed at least two different indices across key social sectors that would annually rank states on the basis of improvement in outcomes across these sectors. These include the education index and the health index. It plans to soon unveil the water and sanitation index.
The Department of Industrial Policy and Promotion, which is under the commerce ministry, has already been ranking states over the last few years on the basis of measures taken by them to improve the ease of doing business.