Govt depts must make payments above Rs.5k via e-Payment: Fin Min

The Dollar Business Bureau

The Finance Ministry has made it mandatory for all the government departments to do payments through e-payment mode and not cash, for transactions above Rs.5,000.

The finance ministry has given directions to all the departments for implementing the new order with immediate effect, an official statement said.

“Any payment above Rs.5,000 to suppliers, contractors, grantee/loanee institutions etc., by government departments to be now made through e-payment,” it said.

With Prime Minister Narendra Modi strongly supporting for a cashless economy in order to curb black money and weed out corruption, the recent decision by the ministry could be seen as a step in that direction. This is also a move forward for full digitisation of payments in government departments.

Last month, in a sudden and bold move, the government had demonetised the old currency notes of Rs.500 and Rs.1,000 in an effort to flush out the black money from the Indian market.

In order to achieve the goal of full digitisation of government payments, Finance Ministry has again reviewed the prevailing limit of Rs.10,000 prescribed for e-payment to suppliers, etc. The government has now taken the decision to lower this threshold ceiling from Rs.10,000 to Rs.5,000, the statement said.

In this regard, the last review was made in August, 2016.