All panchayats to be UPI-enabled on Aug 15

All panchayats across the country will mandatorily use digital payments for all development work and revenue collection this Independence Day onwards, and will be declared UPI-enabled, a letter issued by the Panchayati Raj Ministry said.

States should "announce and inaugurate" the UPI-compliant panchayats in the presence of prominent dignitaries, like chief ministers, MPs, and MLAs, the ministry said in the letter to states and Union territories. Secretary, Panchayati Raj Ministry, Sunil Kumar said almost 98 per cent panchayats have already started using UPI-based payments. "Payments worth almost Rs 1.5 lakh crore have been made through the Public Financial Management System (PMFS). Payments to panchayats will now be made digitally. Payments in cheques and cash have almost been stopped," Kumar said.

Panchayats have also been asked to hold meetings with service providers and vendors on June 30. A list with details of contact persons from UPI platforms GPay, PhonePay, PayTM, BHIM, Mobikwik, WhatsApp Pay, Amazon Pay and Bharat Pe has been shared by the ministry. By July 15, panchayats have to choose appropriate service providers, and finalise vendors by July 30, as per guidelines by the ministry.

Panchayats have also been asked to choose a single vendor which covers the whole area so as to allow economies of scale. It has also been recommended to create a centralised dashboard for monitoring transactions in real time. Training camps will be held at district and block level for officials. Minister of State for Panchayati Raj Kapil Moreshwar Patil said enabling digital transactions will help in checking corruption.

"Most panchayats are now using digital payments. It will help in checking corruption. From planning to payment, everything is happening digitally," Patil told PTI. According to government data, 806.3 crore transactions worth Rs 12.98 lakh crore were made through BHIM in January 2023 alone. Contribution of rural and peri-urban areas in digital transactions is around 50 per cent.