Big push for digitisation, less-cash society a key theme of Budget

Modi govt's BHIM App found prominent mention in FM Arun Jaitley's Budget speech

Just like demonetisation, digitisation dominated Finance Minister Arun Jaitley’s 2017-18 Budget speech.

Aware that the government's push for a less-cash society faces challenges on the ground due to the lack of enabling infrastructure to allow digital payments, the finance minister made several proposals in his Budget speech. The key proposals were the promotion of the Bhim (Bharat Interface for Money) App by offering incentives to both users and merchants, reducing duties on components to make payment devices locally in India, and looking at mandating the use of digital payments in petrol pumps, universities and municipalities.

The push for ‘going digital’, which is part of the Narendra Modi-led government’s flagship ‘Digital India’ campaign, was visible everywhere — from initiatives at the village level to the Reserve Bank of India. 

The government has allocated Rs 10,000 crore for its BharatNet programme with a target to reach 150,000 gram panchayats with high-speed broadband by the year's end. Over the course of three years, it also plans to integrate 65,000 primary agriculture credit societies (PACs) with the backend banking infrastructure of district cooperative banks at a cost of Rs 1,900 crore.

Analysts, however, say that there is no demarcation made in the Budget by the government regarding which departments would spend the money.

“The government is talking about digitisation of everything from villages, initiatives for women and children, to digital economy everywhere, but which ministry will spend what is still not clear,” said a senior analyst in an international consultancy.

The Ministry of Electronics and Information Technology, which gives the technology direction to other ministries, has seen its budget increase by Rs 534 crore to Rs 4,039 crore for the year ahead.

In his speech, Jaitley emphasised on digitisation in various sectors: digital literacy being part of women and child development, digital skill development in villages under the DigiGaon initiative, online education, making digital donations to political parties. 

The Budget also highlighted paperless digital governance in government offices, creating a less-cash society via the Unified Payment Interface, Aadhar Pay, and the BHIM App.

“Promotion of a digital economy is an integral part of the government’s strategy to clean the system and weed out corruption and black money. It has a transformative impact in terms of greater formalisation of the economy and mainstreaming of financial savings into the banking system. This, in turn, is expected to energise private investment in the country through lower cost of credit. India is now on the cusp of a massive digital revolution,” Jaitley said in his speech.

The recently launched BHIM app found prominent mention in the Budget. The government plans to bring in major digital payment infrastructure and grievance handling mechanisms. In order to promote digital money in villages, the focus would be on rural and semi-urban areas through post offices, fair price shops and banking correspondents.  

In the coming weeks, concrete steps would be taken to promote and possibly mandate petrol pumps, fertiliser depots, municipalities, block offices, road transport offices, universities, colleges, hospitals and other institutions to have facilities for digital payments, including through the BHIM App. A proposal to mandate all government receipts through digital means, beyond a prescribed limit, is also under consideration.  

Further, Mahila Shakti Kendras would be set up at the village level with an allocation of Rs 500 crores in 1,400,000 Integrated Child Development Scheme Anganwadi Centres. These would provide digital literacy among a host of other services.

As far as education is concerned, the government plans to leverage information technology and launch the SWAYAM platform with at least 350 online courses. This would enable students to virtually attend the courses taught by the best faculty, take tests and earn academic grades.  

Even donations given to political parties will get a digital touch. Any donation above Rs 2,000 will have to be made by cheque or digitally.

Also, the government has stepped up the allocation for BharatNet Project to Rs 10,000 crore in 2017-18. By the end of 2017-18, high speed broadband connectivity on optical fibre will be available in more than 1,50,000 gram panchayats, with wifi hot spots and access to digital services at low tariffs. A DigiGaon initiative will be launched to provide tele-medicine, education and skills through digital technology.