Cashless India: Buying petrol, insurance with cards to be cheaper

NEW DELHI, Buy petrol or diesel with your debit or credit card or e-wallet from a petrol pump which has a licence from a public sector unit (PSU), and you will soon get a discount of Rs 7.5 for every transaction of Rs 1,000. You will also not need to pay the two-per cent service tax and merchant discount rate for purchases up to Rs 2,000.


One month since Prime Minister Narendra Modi announced the demonetisation of old series Rs 500 and Rs 1,000 currency notes, Union Finance Minister Arun Jaitley on Thursday announced a number of sops to push for a cashless economy.


He said cashless transactions had increased since November 8. For instance, about 45 million people buy petrol or diesel per day, spending about Rs 1,800 crore, 20% of which is through digital. In November, about 40% transactions at petrol pumps were digital.




The incentives offered on Thursday could shift at least 30% more to digital. “This would reduce cash requirement of nearly Rs 2 lakh crore per year,” said Jaitley.


There’s more on offer. Though buying insurance from state-owned insurers and railway tickets, digitally, would get sops and discounts. Allaying concerns that these would be withdrawn once the situation normalised, Jaitley said there was no “end date” for these.


Public dealings with the government and PSUs would also be free of transaction fees and MDR charges if done digitally. Bankers, however, feared loss of revenue because of this.


“It will definitely lead to a dent in the income but we will wait for more clarity to see if the government will compensate us for this,” said Ashutosh Khajuria, chief financial officer, Federal Bank.