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The government is likely to reimburse state-run oil-marketing companies (OMCs) and Indian Railway Catering and Tourism Corporation (IRCTC) the amount they give as rebate to customers who purchase petro products digitally.
“Though the amount given as rebate is not very high, the ministry of finance is likely to reimburse them through a provision in the Budget,” a government official said.
On December 8, Union Finance Minister Arun Jaitley said the government would incentivise digital payments by offering a discount at 0.75% of the sale price to those who purchase petrol and diesel digitally. Nearly 45 million customers buy petrol or diesel at petrol pumps every day.
It is estimated that petrol and diesel worth Rs 1,800 crore is sold every day. Of the amount, 20% was being paid through digital means before demonetisation. In November the digital payment proportion increased to 40%. “The incentive scheme has the potential of shifting at least 30% more customer to digital means which will further reduce the cash requirement of nearly Rs 2 lakh crore annually at the petrol pumps,” he said at a press conference.
Bansal said the rebate to customers comes as a credit by the bank on whose card the transaction has been made. When the bank settles the payment with dealers, it deducts amount. Subsequently, details of such transactions are provided by the banks to OMCs which digitally credit the amount to dealers. The entire exercise takes three days.
Going by the government calculation, if 70 of petrol and diesel sales becomes cashless, state run oil marketing companies would have to take a hit of about Rs 1,680 crore on an annualised basis due to the 0.75% discount.
Besides, railway subsidiary IRCTC will suffer a loss of about Rs 25.2 crore for offering free insurance cover. Passengers buying railway ticket online are being given free accidental insurance cover of up to Rs 10 lakh. Nearly 14 lakh railway passengers are buying tickets everyday out of which 58% tickets are bought online through digital means. “It is expected that another 20% passengers may shift to digital payment methods of buying railway tickets. Hence nearly 11 lakh passengers per day will be covered under the accidental insurance scheme,” Jaitley said.
For paid services like catering, accommodation, retiring rooms etc. being offered by railways through its affiliated entities/corporations to the passengers, customers will get a discount of 5% for payment of these services through digital means. Another official connected with the move said OMCs could for the time being recover the rebate amount through price adjustments and increased sale volumes through the digital mode. The rebates, however, have not made much impact to the overall sale volume of petrol and diesel, said Ajay Bansal, national president, All India Petroleum Dealers Association. “There is a drastic increase of about two and a half times in digital transactions while cash payments have reduced by 40%. This more because of cash crunch rather than rebates. The sales, however, have declined by 20% after demonetisation,” he said.
Bansal said even petroleum dealers would gain if digital payment becomes a habit among consumers. “We will not have to bother about security to guard our cash at petrol pumps so we are promoting digital payments,” he said.
