Benefits offered for digital payments

1. Digital payments for petrol and diesel at government-run petrol pumps will get a discount of 0.75 per cent. 
2. Service tax, on digital transactions of up to Rs. 2,000, would also be waived.
3. Also, those who make digital payments to buy general insurance from public sector companies will get a 10 per cent discount, and those buying life insurance will get an 8 per cent discount. 
4. All suburban rail travellers will get a 0.5 per cent discount on the purchase of monthly or seasonal passes using digital payments from January 1. 
5. Regional rural banks and cooperative banks would issue Rupay debit cards to all 4.32 crore farmers with kisan credit cards to enable them to make digital transactions.
6. Travellers paying for railway catering, accommodation and retiring room facilities electronically would get a 5 per cent discount.
7. The Central government departments and central public sector undertakings will ensure that transaction fee or MDR (merchant discount rate) charges associated with payments through digital means shall not be passed on to the consumers and all such expenses shall be borne by them.

Increase in preference for digital transactions
“In the month since the demonetisation announcement of November 8, the national average of digital payments among these has risen to 40 per cent from 20 per cent.” Mr. Jaitley said. 

Reason for offering benefits
The Centre is giving a push to alternative payment methods after its decision to withdraw high-denomination bank notes has triggered a shortage of cash that has impacted economic activity and livelihoods, particularly in the rural hinterland.

The RBI on December 7 cut its gross value-added growth projection for the year ending March 2017 by 50 basis points to 7.1 per cent, citing the currency withdrawal as a factor.