NEW DELHI: Discounts on petrol and diesel, service tax exemption on payments up to Rs 2000, 8-10% off on insurance premiums — all part of a package announced by the government to promote digital transactions and get people to stop using cash. Other measures include price cuts on suburban train tickets and free accident cover on rail travel.“One of the key objectives is to reduce cash transactions in the economy and move towards digital transactions,” Finance Minister Arun Jaitley told reporters after unveiling the measures on Thursday. “Dealing with cash has economic cost, some cost in inbuilt and some apparent.”Keen to bring about a radical shift from cash to digital transactions, the government announced 11incentives to encourage e-payments a month after it cancelled the legal tender status of Rs 500 and Rs 1,000 notes.“Credit cards, debit cards, e-wallets need to be encouraged and in this one month we have seen this switchover happen. Government wants this shift to be much faster,” Jaitley said. Prime Minister Narendra Modi scrapped the banknotes on November 8 in a bid to flush out cash earned through illegal activities, or earned legally but never disclosed.Since then, the government has been pushing the shift to a cashless economy . The package seeks to boost e-transactions by bringing down their cost and making them more accessible.It is estimated that petrol and diesel worth Rs 1,800 crore is sold daily and 20% of this is paid through digital means. This doubled to 40% in November, shifting cash transactions of Rs 360 crore per day to the digital realm.“The incentive scheme has the potential of shifting at least 30% more customers to digital means, which will further reduce the cash requirement to Rs 2 lakh crore a year at the petrol pumps,” Jaitley said.As part of the package, state-run general insurance companies will offer discounts of up to 10% on payment of premiums through digital means on their portals. Life Insurance Corporation will offer 8% discount on all new products.The government has waived service tax on transaction charges/merchant discount rate (MDR) that stores have to pay when a customer swipes a debit or a credit card to make a payment. This relaxation will apply to payments up to Rs 2,000. Central government departments and public sector enterprises will waive transaction and MDR charges completely on digital payments Public sector banks have been advised not to charge merchants more than Rs 100 a month rental for point of sale (PoS) terminals at which cards are swiped.The National Bank for Agriculture and Rural Development (Nabard) will support rural regional banks and cooperative banks in issuing RuPay Kisan Cards to 4.32 crore Kisan Credit Card holders to enable them to make digital transactions at PoS machines, micro ATMs and ATMs.Monthly or season suburban railway tickets will enjoy a discount of 0.5% from January 1. Online rail ticket purchases will get accident cover of Rs 10 lakh. Paid services such as food, accommodation, retiring rooms, etc, offered by the railways through its affiliated entities to passengers will get a discount of 5%. National highway tolls paid through electronic tags will get a discount of 10% up to March 31.Jaitley said Indians were too reliant on cash. “There is a cost of transacting in cash and that cost of transacting in cash has to be borne by the economy. It is also borne by the political system,” he said. “These are costs which are visible. There are costs which are invisible. Excessive cash can also lead to a lot of malpractices and therefore, in the long run, we are using this also as an opportunity to move towards digitisation.”Asked about the term of the incentives, Jaitley said no end date had been prescribed. On whether the discounts will be provided by private sector companies, Jaitley said it was up to them. “It is PSUs (public sector units) which have taken this decision,” he said.“The private sector has to decide in the world of competition. They are free to sell costlier petrol and face the consequences of the market.”He said the digital economy will have implications for political donations as well. “If it becomes digital, if it becomes smaller donation, if it becomes lesser donation from a larger body of donors, it will be a great day for Indian democracy,” he said.The finance minister said he has been repeatedly stating that there is a cost of dealing in cash both to the economy and to the political system. “After all, internationally you have seen in large democracies, lakhs and millions of people donating small amounts online to political parties,” he said.For those using cards and e-wallets, Petrol and Diesel purchases will now attract a 0.75% discount.The government will provide 2 POS or Point of Sale machines for free to each village that has a population of over 8,000.Railways to give 5% discount on catering, retiring room on payment by digital modeAll railway passengers who buy tickets online get free accident insurance cover worth Rs 10 lakhMonthly and seasonal tickets for suburban railways to offer 0.5% disc on digital paymentsInsurance bought online from customer portal of public sector companies will get 8% discount for life & 10% for general insurancePublic Sector Banks will ensure that merchants don't need to pay more than Rs. 100 per month as monthly rental for PoS terminalsDigital transactions of up to Rs 2,000 will be exempted from service taxHighway toll will see 10% discount on digital paymentsNABARD will give Rupay card to people who have Kisan Credit CardAll decisions to be implemented with immediate effect.