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Panchayats to get UPI-enabled digital transactions facility

  • Published
    30th Jun, 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.

About the move:
  • The government has planned to create a centralised dashboard for monitoring transactions in real time of digital transactions in Panchayats.
  • Training camps will be held at district and block level for officials.
  • Significance: It will help in checking corruption in Panchayats.

Panchayati Raj Institutions (PRIs) are making digital payments through PFMS-eGram Swaraj interface, and over 90% of PRIs have been audited online.

PFMS-eGram Swaraj interface:

  • The Public Financial Management System (PFMS) is a web-based application for payment, accounting and reconciliation of Government transactions and integrates various existing standalone systems.
    • Payments worth almost ?1.5 lakh crore have been made through the Public Financial Management System (PMFS).
  • The primary objective of PFMS is to establish an efficient fund flow system and expenditure network.
  • 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.
  • It will also assist in enhancing the credibility of Panchayats which would induce greater devolution of funds to PRIs.
  • It will help in establishing a strong financial system by integrating the PRIASoft and Public Financial Management System (PFMS).

Digitising Rural India:

  • Under Digital India Programme, Ministry is implementing e-Panchayat Mission Mode Project (MMP) with the aim to transform the functioning of Panchayati Raj Institutions (PRIs) by making them more transparent, accountable, and effective.
  • Building on the achievements in the past, the Ministry launched eGramSwaraj, a work-based comprehensive application for PRIs under the e-Panchayat MMP on 24th April 2020.
  • Under e-Panchayat Mission Mode Project funds are being provided to National Informatics Center Services Inc. (NICSI) for central level support for maintenance of e-Panchayat applications.

Need for Digitalisation (in rural India):

  • The Indian economy is predominantly rural with over two-thirds of its population and workforce residing in rural areas.
  • Rural India contributes a substantial part of the total net value added in many sectors, with an overall 46% contribution to our national income.
  • Thus, the growth and development of the rural economy is imperative for inclusive development and overall growth of the country.


  • Harness Internet users: Rural India is expected to leapfrog urban India and constitute nearly half of all Indian internet users by 2020.
  • 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:

  • SAMARTH Campaign:
    • Union Minister for Rural Development and Panchayati Raj has launched the ‘Campaign on Promoting Digital Transactions in 50000 Gram Panchayats' under the AmritMahotsav in Lucknow.
    • The key thrust of the campaign is to promote Digital Transactions in rural areas, particularly among women.
    • BC Sakhis in Uttar Pradesh: They are enabling over 5 crore 57 lakh digital transactions and providing doorstep banking services to the last mile of the population.
    • Biometric Point of Sale (PoS) machines and appointment letters to newly appointed BC Sakhis.
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