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All Panchayats to Go UPI-Enabled on August 15, Announces Centre

The move towards digital payments at the panchayat level is expected to streamline financial processes, reduce corruption, and promote transparency in rural areas.

Shivam Dwivedi
All Panchayats to Go UPI-Enabled on August 15, Announces Centre (Photo Source: BHIM UPI)
All Panchayats to Go UPI-Enabled on August 15, Announces Centre (Photo Source: BHIM UPI)

All panchayats in India will be required to adopt digital payments for development projects and revenue collection starting this Independence Day, according to a letter issued by the Panchayati Raj Ministry.

The ministry has urged states to declare and inaugurate the Unified Payments Interface (UPI)-enabled panchayats in the presence of distinguished dignitaries such as Chief Ministers, Members of Parliament, and Members of Legislative Assemblies.

Sunil Kumar, Secretary of the Panchayati Raj Ministry, stated that nearly 98% of panchayats have already begun using UPI-based payments. He further emphasized that payments worth approximately Rs 1.5 lakh crore have been processed through the Public Financial Management System (PFMS). Going forward, all payments to panchayats will be made digitally, while payments in the form of checks and cash will be largely phased out.

Kumar mentioned that digital payments have now covered almost all panchayats, with nearly universal coverage reaching approximately 98% of them. In order to assist in this transition, panchayats have been recommended to hold meetings with different service providers and vendors on June 30. The Ministry has distributed a roster of contact individuals from well-known UPI platforms such as GPay, PhonePe, Paytm, BHIM, Mobikwik, WhatsApp Pay, Amazon Pay, and Bharat Pe.

As per the ministry's guidelines, panchayats must select suitable service providers by July 15 and finalize vendors by July 30. Additionally, it is recommended that panchayats choose a single vendor that can serve the entire area, promoting economies of scale. The Ministry has also suggested the creation of a centralized dashboard to monitor transactions in real-time.

Minister of State for Panchayati Raj, Kapil Moreshwar Patil, announced that in order to facilitate the implementation of digital transactions, training camps will be organized at the district and block levels for officials. He expressed his belief that enabling digital transactions would aid in curbing corruption.

He mentioned that the majority of panchayats are currently utilizing digital payments, which, according to him, will contribute to the prevention of corruption. He further highlighted that the entire process, from planning to payment, is now being carried out digitally.

Government data reveals that in January 2023 alone, BHIM processed 806.3 crore transactions worth Rs 12.98 lakh crore. Notably, rural and peri-urban areas contribute approximately 50% of digital transactions. Panchayati Raj Institutions (PRIs) are utilizing the PFMS-eGram Swaraj interface for digital payments, with over 90% of PRIs having undergone online audits, according to the Ministry.

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