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Modi govt doesn’t want to annoy voters, puts off plan to levy security fee on e-payments

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Govt planned to use the cess to build digital security infrastructure to curb growing number of cyber fraud cases.

New Delhi: Ahead of the general elections next year, the Narendra Modi government seems to have developed cold feet about a proposal aimed at securing digital payments by imposing a token ‘security fee’ on every online transaction.

Fearing resentment from voters, the government has now planned to stall the move until the elections.

“In a recent meeting, it was discussed that the move might irk the people so alternate options should be explored to make the transactions safe, considering that the number of people shifting to digital payments is expected to increase by next year,” a home ministry official said.


Also read: Safe Digital India cess? Govt considers ‘security fee’ for every digital payment


The proposal to levy security cess was initially discussed in September at a high-level meeting, chaired by Home Minister Rajnath Singh, on how to curb growing instances of cyber fraud in digital transactions. It was attended by officers from the Ministry of Electronics and Information Technology (MeITY), Home Ministry, Department of Financial Services, Department of Telecom, Reserve Bank of India and Intelligence Bureau.

The cess was proposed to be utilised by creating a fund to procure software and build infrastructure to curb the growing number of cases of online fraud in digital payments.

Crimes related to digital transactions are on the rise, showed home ministry statistics. The number of cases reported to banks related to e-wallets and e-payments jumped from 13,083 in 2014-15 to 16,468 in 2015-16.

According to sources, the proposal was reconsidered keeping in mind people’s sentiments and reaction to the move.

Following this, the Department of Finance made a submission that the proposal be stalled as the problem of cyber fraud has not yet reached a stage where a separate cess needs to be levied to create security infrastructure, and alternate measures could be looked into.


Also read: How a former Infosys engineer became a rich bitcoin miner and ultimately a ‘fugitive’


The government is working on formulating an Act that needs to be in place for regularising digital payments, which will be taken care of by the Finance Ministry, and to fix the responsibilities of agencies.

The Home Ministry has also started work on the creation of a dedicated cyber-forensics lab which will have 27,500 police personnel, along with 13,000 forensic officers, who will be trained to tackle cyber fraud cases.

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