Maharashtra govt endorses Paytm in circular issued to promote digital payment

The Maharashtra education department asked schools to accept fees via Paytm and other forms of cashless payments


After demonetisation, Maharashtra CM Devendra Fadnavis made several announcements to help people live with less cash. Photo: Abhijit Bhatlekar/Mint
After demonetisation, Maharashtra CM Devendra Fadnavis made several announcements to help people live with less cash. Photo: Abhijit Bhatlekar/Mint

Mumbai: Last month, All India Congress Committee (AICC) general secretary and Maharashtra in-charge Mohan Prakash sought to know how mobile wallet Paytm could place full-page advertisements in national newspapers hours after Prime Minister Narendra Modi announced demonetisation on 8 November. Prakash claimed it was not possible for newspapers to carry advertisements so late in the day, apparently suggesting that Paytm had already been tipped off about the currency ban. While Prakash’s knowledge about how newspapers operate may not have been accurate, he drove home the point that digital payment companies had benefited from the thrust on going cashless.

He also made the point that the fine line between the advertisement of a product and the government endorsing that product had been blurred. This was the second instance of a company advertisement featuring Modi’s picture, the first being one by Reliance Jio Infocomm Ltd.

In December, Union minister of state for information and broadcasting Rajyavardhan Rathore told Parliament that Reliance Jio had not sought government permission to use the prime minister’s picture.

In both cases, the firms can claim that they were merely highlighting how their efforts were in sync with the national agenda, although they did violate rules on use of the prime minister’s photograph.

Interestingly, in Maharashtra, internal communications and instructions of government departments expressly mention Paytm as one of the modes of going cashless. There are other cashless means mentioned too, like Real Time Gross Settlement (RTGS), and debit and credit cards. But instead of saying payment through mobile or app-based means, the government circulars specifically mention Paytm.

To be sure, this could be on account of the usage of a brand name as a generic one (like Xerox), rather than a desire to promote the interests of a company.

A circular issued by the state department of education on 16 December, for instance, asks schools to go cashless and accept fees from the students by cheque, RTGS, debit/credit card, and Paytm. Mint has a soft copy of the circular which was issued by the education department’s deputy director, Nagpur division.

A photo of the circular issued by Maharashtra education department. The circular says, students of government aided and unaided schools are required to pay fees/charges under different heads. These fees/charges are paid in cash. However, since the state government has decided to implement a cashless payment policy, please do not accept any fees/charges in cash. All fees/charges should be accepted in cheques/RTGS/debit card/credit card/Paytm.
A photo of the circular issued by Maharashtra education department. The circular says, students of government aided and unaided schools are required to pay fees/charges under different heads. These fees/charges are paid in cash. However, since the state government has decided to implement a cashless payment policy, please do not accept any fees/charges in cash. All fees/charges should be accepted in cheques/RTGS/debit card/credit card/Paytm.

“This is a government department virtually endorsing a private company. If at all the government wanted to promote app-based payments, it could have mentioned the mobile wallet of State Bank of India, which is a nationalized bank,” said a Shiv Sena minister of Maharashtra who did not wish to be named. He said he had pointed this out to chief minister Devendra Fadnavis.

Immediately after the demonetisation drive began, the Fadnavis government made several well-intentioned announcements to help people live with less cash and make their daily payments through alternative means. The public works department, which deals with the roads where toll is charged, released instructions on going cashless. This has had some visible results. For instance, the entry point to Mumbai from neighbouring Thane now accepts toll via Paytm as well. Whether specific instructions were issued to the toll collection agent to use Paytm isn’t known.

An education department official at the Mantralaya, seeking anonymity, conceded that similar circulars were issued by other divisions in the state as well. “It was an inadvertent error. The officer who issued it probably meant that students should be allowed to make mobile payment. The circular should have avoided naming a company but our officers are also learning,” the official said.

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