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PM launches cashless/less cash township models across 12 states

Prime Minister has launched 81 cashless/less cash townships across 12 states in Nagpur. The 81 townships included 56 in Gujarat and 25 in 11 states including Delhi, Gujarat, Uttar Pradesh, Madhya Pradesh, Maharashtra, Bihar and Chhatisgarh. The model of cashless/less cash township was developed by Gujarat Narmada Valley Fertilizers and Chemicals Ltd (GNFC) across these States under the auspices of National Institution for Transforming India (NITI) Aayog.

GNFC’s township at Bharuch (Gujarat) had become India’s first 100% cashless township after demonetization. It is expected that these 81 townships will deliver 2.5 lakh cashless transactions per day, translating into 9 crore cashless transactions in a year.

Cashless townships

The townships for adopting GNFC’s model were selected based on a third-party assessment by Price Waterhouse Coopers (PwC). The chosen 81 townships belonged to that of central public sector companies such as ONGC, Indian Oil, NTPC, SAIL, BHEL, NMDC, CRPF, BSF and Police Lines and also to private sector townships like Reliance, Essar, Adani, Birla Aditya, Welspun etc.

Criteria

The criteria for qualification of a township to a less cash township are: townships must have completed the payment acceptance infrastructure; all the families residing in the townships must have been covered under training programmes; 80% of total transactions during the review period should have been done through digital modes.

NITI Aayog has appreciated GNFC’s model and had advised Central ministries and CMDs of 300-plus central PSUs for quickly adopting to this model.

Significance

As per the study conducted by PWC on GNFC’s cashless initiative, following benefits have been identified:

  • It resulted in financial inclusion, cashlessness as a lifestyle, better parental control over child’s expenses, women’s empowerment, more convenience in performing transactions and social upliftment.
  • Over 96% of farmers during the assessment reported cost savings resulting from fewer trips to fertiliser shops and discounts on cashless transactions. They have also reported better money management.

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Government launches Bharat QR code

The Union Government has launched Bharat QR code, a quick response (QR) code to enable digital payments without card swiping machines.

It is world’s first interoperable payment acceptance solution launched by Indian Government to move towards less-cash economy.

Key facts
  • Bharat QR code has been developed by jointly by National Payments Corporation of India (NPCI), Visa, MasterCard and American Express under instructions from Reserve Bank of India (RBI).
  • It works as common interface for the MasterCard/Visa/RuPay platforms and also facilitate acceptance of Aadhaar-enabled payments and Unified Payments Interface (UPI).
  • It enables person to make payments to retailers without using the merchant’s ID or number. It eliminated need of using card swiping machines making digital payments.
  • Using, BharatQR code merchants will be required to only display one QR code instead of multiple ones. Users can make payment by scanning the code.
  • BharatQR code is of two types static and dynamic. In static QR code, first code need to be scanned and then amount is entered to make payment.
  • In case of dynamic QR code, new QR code will be generated in real time for every transaction. In this case there is no need to enter the amount. The payment is just made by scanning and entering the PIN.
 What is QR code?
  • QR code (Quick Response code) is a two-dimensional (matrix) machine-readable bar code made up of black and white square. This code can be read by the camera of a smartphone.
  • It is used for storing URLs or other information that link directly to text, emails websites phone numbers. It is capable of 360 degrees (omni-directional), high speed reading.
  • QR Code can store up to 7089 digits as compared to conventional bar codes which can store max 20 digits. It encodes same amount of data in one-tenth the space of a traditional bar code.
  • It carries information both horizontally and vertically. It has error correction capability and data stored in it can be restored even if it is partially damaged or dirty.

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Union Cabinet approves ordinance to pay salaries by cheques

The Union Cabinet has approved a draft ordinance to empower states and allow industries to pay workers’ wages digitally, through a direct bank transfer to accounts or by cheque in a bid to encourage cashless transactions.

The draft ordinance proposes changes to the Section 6 of the Payment of Wages Act, 1936 to encourage cashless transactions. It will need the President’s assent to become law as per article 123 of the Constitution.

Key Facts
  • It will allow industries to pay wages to workers earning up to Rs. 18,000/ month, without taking their explicitsalary consent as required under present Act.
  • However, wage payment through the banking system will only be optional, until State governments or Union Government come up with a notification for specific industries since Labour is in the concurrent list.
  • The present law (1936 Act) states that all payment of wages should be in cash. Under it has mandatory provision asking employers to obtain written permission of the worker to pay either by cheque or by crediting wages to his or her bank account.
Comment

The payment of wages through cheque or DBT of employed persons has twin motives  i.e. it will reduce complaints regarding non-payment or less payment of minimum wages and serve purpose of digital and less cash economy. The move is significant in view of the Union Government is promoting cashless transactions after its decision to scrap the old high value Rs. 500 and Rs. 1,000 currency notes. Earlier Payment of Wages (Amendment) Bill, 2016 introduced in the Lok Sabha during 2016 winter session but was not cleared owing to the impasse in Parliament.

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