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Panchayats to get UPI-enabled digital transactions facility

  • Category
    Polity & Governance
  • Published
    7th Jul, 2023


As per the letter issued by the Panchayati Raj Ministry, all Panchayats across the country will mandatorily use digital payments for development work and revenue collection and become fully UPI-enabled. 

What is the need?

  • Universal coverage of digital payments: Nearly 98% of panchayats have already begun using UPI-based payments.
    • Payments worth approximately Rs 1.5 lakh crore have been processed through the Public Financial Management System (PFMS).
    • Contribution of rural and peri-urban areas in digital transactions is around 50 per cent.
  • The government has planned to create a centralised dashboard for monitoring transactions in real time of digital transactions in Panchayats.
  • Significance: It will help in checking corruption in Panchayats.

Public Financial Management System (PFMS)

  • It is a web-based application for payment, accounting and reconciliation of Government transactions and integrates various existing standalone systems.
  • Aim: To bring in better transparency and strengthening of the e-Governance in Panchayati Raj Institutions (PRIs) across the country through decentralized planning, progress reporting and work-based accounting.

How would this development benefit?

  • Help for easy access to services: Digitisation can facilitate some of the key needs of rural India including e-governance services, banking and financial services, educational and healthcare services, mobile/DTH recharge, e-ticketing services, online shopping, etc.
  • Boosting rural entrepreneurship: Over 10 years ago, the government, through its flagship National e-Governance Plan, envisaged to empower rural citizens by making available various government services to them via electronic media and created access points, i.e. common service centres run by village-level entrepreneurs (VLEs) at the village and gram Panchayat level.

Government Steps taken in the direction:

  • Digital India Campaign: Digital India is a campaign launched in 2015. The motto of the campaign is “Power to empower”. The initiative includes plans to connect rural areas of India within the circumference of high-speed internet networks
  • e-Panchayat Mission Mode Project (MMP): Under Digital India Programme, Ministry is implementing e-Panchayat MMP with the aim to transform the functioning of Panchayati Raj Institutions (PRIs) by making them more transparent, accountable, and effective.
  • eGramSwaraj: Building on the achievements in the past, the Ministry launched eGramSwaraj, a work-based comprehensive application for PRIs under the e-Panchayat Mission Mode Project on 24th April 2020.
  • Pradhan Mantri Gramin Digital Saksharta Abhiyan: The Scheme is aimed at empowering the citizens in rural areas by training them to operate computers or digital access devices.
  • SAMARTH Campaign: Under the SAMARTH Campaign, the government seeks to foster the adoption of digital transactions in 50,000 Gram Panchayats across India.

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