In a notable step towards digitization, more than 1.73 lakh panchayats across India have adopted Unified Payments Interface (UPI) technology for digital transactions. This development allows rural citizens to make tax and non-tax payments digitally, enhancing the financial strength and governance of Panchayati Raj Institutions (PRIs), announced Union Minister of State for Panchayati Raj, Professor S.P. Singh Baghel.
Minister Baghel pointed out that rural residents can now use UPI platforms to pay various taxes and fees, including property tax, water tax, streetlight tax, trade license fees, building permission fees, and layout approval fees. This move not only simplifies payment processes but also strengthens financial infrastructure within rural areas.
Additionally, the Minister highlighted the ease of linking Prime Minister Jan Dhan Yojana (PMJDY) accounts with UPI IDs, which facilitates seamless transactions and enhances financial inclusion. This integration allows citizens to access their accounts, perform transactions, and benefit from the PMJDY program, including RuPay Insurance coverage.
“This streamlined approach encourages rural citizens to take advantage of the financial services and insurance benefits provided by the government, promoting financial empowerment and security among the rural population”, Baghel stated.
The impact of mobile phones and digital banking services in India has been significant, lifting 800 million people out of poverty. Dennis Francis, President of the 78th Session of the United Nations General Assembly (UNGA), observed that rural farmers, who previously lacked access to banking systems, can now conduct all their business transactions using smartphones.
India has seen remarkable growth in digital payments over the past decade, with UPI becoming the preferred payment method for many citizens. Baghel also noted that the Ministry of Panchayati Raj supports state efforts through Central Finance Commission Grants and the revamped Rashtriya Gram Swaraj Abhiyan (RGSA).
The RGSA scheme offers financial and technical support for the capacity building and training of elected representatives and PRI functionaries, ensuring that local governance continues to evolve and meet the population's needs.
The widespread adoption of UPI in panchayats marks a significant milestone in India’s journey toward digital empowerment and financial inclusion, particularly in rural areas.