Govt ask all urban local bodies to shift to e-payments

Officials were instructed to promote Internet banking, online banking besides using PFMS developed by the finance ministry for fund transfers in urban areas


States have been asked to adopt PFMS up to city level to enable transfer, accounting, reconciliation and monitoring of transfer of funds under various government schemes. Photo: Pradeep Gaur/Mint
States have been asked to adopt PFMS up to city level to enable transfer, accounting, reconciliation and monitoring of transfer of funds under various government schemes. Photo: Pradeep Gaur/Mint

New Delhi: In an attempt to encourage cashless transactions, the ministry of urban development has asked all statutory 4,041 urban local bodies to shift to e-payments at the earliest.

These bodies are in cities and towns that account for about 75% of the total 400 million urban population in the country.

Rajiv Gauba, secretary of urban development conveyed the government’s message to senior officials of the concerned states at an interaction on various aspects of ensuring cashless transactions on Sunday.

The officials were instructed to promote internet banking (RTGS/NEFT), online banking using credit and debit cards besides using Public Finance Management Systems (PFMS) developed by the finance ministry for fund transfers, accounting and reconciliation in these urban areas.

Gauba also emphasized that all transactions relating to both income and expenditure of urban local bodies need to be shifted to e-payment mode. These include payment of property tax, professional tax, all user charges like water and power bills, all kinds of fee and licence charges, online booking of community halls, issue and renewal of birth and death certificates, registration of shops and other establishments, library membership etc.

Expenditures which are to be made cashless include payment of salaries and wages to all regular and contractual employees, all contract and work relate payments, procurements, and beneficiary payments like social security.

According to officials from Madhya Pradesh, seven major cities have already enabled cashless transactions and all the 378 cities and towns in the state would do so by March next year.

Uttar Pradesh and Goa have reported using PFMS up to city level and found it to be very useful.

City governments were asked to take up necessary infrastructure and capacity building, awareness campaigns for opening of accounts for employees of all categories and their family members.

States have been asked to adopt PFMS up to city level to enable transfer, accounting, reconciliation and monitoring of transfer of funds under various government schemes.

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