The Rajasthan government has written to the Centre for waiving different types of financial charges on Aadhar-enabled payment system (AePS) to promote cashless transactions in the public distribution system (PDS). The state has also requested the Centre to ask telecom service providers to ensure connectivity at 135 locations in the state where PoS devices don’t work because of lack of connectivity.
Rajasthan chief secretary OP Meena has written to the union finance ministry to either waive financial charges – transaction, authentication and synchronisation charges – levied by the National Payments Corporation of India (NPCI) and banks or bear them itself.
“In Rajasthan, 1.25 crore transactions are done through PoS devices every month. It would not be advisable to pass on these charges to either beneficiaries or the FPS (fair price shop) dealers as this would hamper the process of digital payments. The state government is also in no position to bear these charges,” the letter said.
Generally, the financial charges come to around ₹100 per transaction because banks have a minimum charge. For 1.25 crore transaction, this money will be ₹125 crore a month and ₹1,500 crore annually.
“Alternately, the financial burden of these charges may be borne by GoI to facilitate AePS model in PDS,” the chief secretary suggested.
Rajasthan decided to adopt the AePS as it seems to be the most feasible model considering the fact that the FPS in the state already has been equipped with PoS machines with biometric scanners and for this model, neither the dealer nor the beneficiary is required to have a smartphone. For all other digital payment models – such as e-wallet, unified payment interface (UPI) and net banking – a smartphone is needed for completing the transaction.
The issue of financial charges on digital payments was raised at a workshop of food ministers and food secretaries in New Delhi on January 19, 2017, the letter notes.
In Rajasthan, the state leading in FPS automation, 24,724 PoS devices have been installed at FPS but 135 of them don’t function because of lack of connectivity. The FPSs at these locations are distributing PDS commodities manually without biometric verification.
Subodh Agarwal, Rajasthan’s principal secretary of food and civil supplies department, says the state has written to the Union food and PDS department to ensure connectivity at these locations for “compliance of directions of Government of India on FPS automation”.
Earlier this month, a ration dealer in Kotda block of Udaipur district was seen sitting on a tree-top to operate the PoS machine. This shop is among the 135 where connectivity is not available.