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Insurance For All: Expanding Coverage To Strengthen India’s Social Security System

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  • India ranks as the 10th largest insurance market globally by premium volume (Swiss Re Report).
  • Share of insurance and pension funds in household financial assets rose to 29.6% in FY25 from 28.6% in FY19, as per Economic Survey 2025-26.
  • FDI limit in insurance raised to 100% under the Sabka Bima, Sabki Raksha (Amendment of Insurance Laws) Act, 2025.
  • Pradhan Mantri Jeevan Jyoti Bima Yojana recorded 26.88 crore enrolments and 10.45 lakh claims disbursed (as of Feb 2026).

Introduction

A robust economy requires strong risk-protection systems, and insurance serves as a key pillar of financial security and social protection. It is not just a financial contract; it is a system where individuals and businesses transfer risk to insurers in exchange for premiums. By pooling risks, insurance enables households and enterprises to recover from unforeseen events without exhausting savings or selling productive assets. In this way, insurance ensures financial continuity and supports sound financial planning by protecting income, assets, and long-term economic security.

In India, insurance plays an important role in strengthening social security and promoting financial resilience. Rising healthcare costs, livelihood risks, and economic uncertainties underline the importance of accessible insurance coverage for citizens, families, and businesses. Recognising this, the Insurance Regulatory and Development Authority of India (IRDAI) committed to the vision of “Insurance for All by 2047”. It aims to ensure that every citizen has adequate life, health, and property insurance, and that every enterprise has access to suitable risk protection.

The Indian insurance sector is undergoing a significant transformation in line with this vision. Regulatory reforms and policy initiatives are expanding coverage, improving affordability, and strengthening consumer protection. The transition towards a principle-based regulatory framework has streamlined compliance requirements and provided insurers with greater flexibility to innovate, thereby supporting inclusive insurance growth. Together, these developments are positioning insurance as a vital component of India’s social security framework and economic strength.

Insurance Sector Performance

Insurance, as a vital component of the financial sector, plays a crucial role in India’s economy. Beyond offering protection against life, property, and casualty risks and serving as a safety net across both urban and rural areas, the sector also promotes savings. Its sustained development is essential to support India’s ongoing economic transformation.

India’s insurance sector continued its growth momentum in 2024–25, consolidating its position as the 10th largest insurance market globally by nominal premium volumes, with a market share of 1.8%, as per the Swiss Re report. Insurance penetration stood at 3.7% with life insurance at 2.7% and non-life at 1% while insurance density increased marginally to USD 97.0. Reflecting the scale and growing activity in the sector, during FY 2024-25, the sector issued 41.84 crore policies, collected premiums of ₹11.93 lakh crore, paid claims of ₹8.36 lakh crore, and reported assets under management of ₹74.44 lakh crore as on 31 March 2025. The increasing role of insurance is also reflected in household financial assets- total value of financial assets held by households, including savings, investments and entitlements. The share of insurance and pension funds in household financial assets also rose from 28.6% in FY 2018-19 to 29.6% in FY 2024-25, reflecting growing financial awareness among households.

Insurance penetration is defined as gross premiums written for direct life and non-life insurance business as a percentage of GDP.

Insurance density is the ratio of premiums to population (per capita premium).

The two main types of Insurance:
  • Life insurance provides financial protection against contingencies related to human life, such as death, disability, accidents, and retirement.
  • Non-life insurance covers property, businesses, and individuals, offering compensation on an indemnity basis for losses or damages. It provides monetary support in case of unforeseen events and includes health, motor, home, fire, marine, travel, portable equipment, crop, liability insurance, among others.
Growth of Insurance Premium

(In ₹lakh crore)
     FY 2020-21   FY 2024-25 Growth
Total Premium Income 8.30 11.90 43.37 %
Life insurance premiums 6.30 8.86 40.63%
Non-Life insurance premiums 2.02 3.10 53.46%

Notably, the life insurance segment continues to anchor the sector. It accounts for 91% of the total assets under management (AUM)- the overall market value of assets that a financial institution oversees on behalf of its clients at a given point in time. In addition to this, it represents approximately 74% of the total premium income. Within the non-life segment, health insurance has emerged as the leading business line, contributing 41% of gross domestic premium and surpassing motor insurance.

An insurance premium is the amount paid by an individual or business to obtain an insurance policy. The premium varies across policyholders, as it is determined by several influencing factors, such as age, area of residence, nature of employment, medical ailment, income and others.

Insurance accessibility has also improved through a combination of physical presence and intermediary expansion. The total number of insurers’ offices stood at 21,338 as of March 2024  which increased to 22,076 in March,2025. Correspondingly, the distribution network grew significantly from approximately 48 lakh in FY2020-21 to nearly 83 lakh in FY2024-25, improving reach across rural areas and socio-economically weaker sections. Presently, 74 insurers are operational, supported by a distribution network of over 83 lakh agents, point-of-sales persons, and institutional partners. This expansion is vital for facilitating delivery of insurance services across various segments, especially in reaching the rural and socio-economically weaker sections of society.

Recent Policy and Regulatory Measures

To strengthen the insurance ecosystem and enhance protection for policyholders, the Government has undertaken a series of legislative and regulatory reforms. These measures aim to improve insurance affordability, expand coverage, promote ease of doing business, and strengthen consumer safeguards across the sector.

Sabka Bima, Sabki Raksha (Amendment of Insurance Laws) Act, 2025

The Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Act, 2025has amended various provisions of the Insurance Act, 1938, the Life Insurance Corporation Act, 1956, and Insurance Regulatory and Development Authority Act, 1999. This enhances citizens’ protection, deepen insurance penetration, accelerate growth, further strengthens the insurance sector and improves the ease of doing business. The key provisions of the policy are outlined below:

Increased FDI Limit: The amendment raises the FDI limit in Indian insurance companies from 74% to 100%. The measure is expected to attract stable long-term investment, facilitate technology transfer, support greater insurance penetration and social protection.

Promote Ease of Doing Business: To ensure uninterrupted service, support policyholders and promote ease of doing business, following amendments were made:

  • One-time registration for insurance intermediaries has been introduced to ensure seamless operations and better service continuity.
  • IRDAI approval threshold for share transfers was increased from 1% to 5%, further simplifying compliance.
  • Net Owned Fund requirement for foreign reinsurers has been reduced from ₹5,000 crore to ₹1,000 crore, encouraging greater reinsurance participation and capacity in India.
  • Insurance laws have been aligned with Digital Personal Data Protection Act, 2023 to create a legal anchor for effective use of digital public infrastructure in the insurance sector, ensuring that policyholders’ information is duly secured and protected.
  • The Indian Insurance Companies (Foreign Investment) Amendment Rules, 2025, notified on 30 December 2025 have rationalised conditions for insurance companies and intermediaries to promote ease of doing business.

Creation of Insurance Awareness: The amendment provides for the creation of a Policyholders’ Education and Protection Fund, to increase citizens’ awareness towards risk protection and promote education for policyholders.

Improved Policyholders’ Protection: To safeguard policyholder, IRDAI has been empowered to order disgorgement of wrongful gains made by insurers or intermediaries. The maximum penalty for non-compliance with the Insurance Act or the IRDA Act has been enhanced from ₹1 crore to ₹10 crore. It encourages insurers and intermediaries to adhere more strictly to rules and standards, thereby improving governance, protecting policyholders’ interests, and enhancing overall discipline and transparency in the insurance sector. Insurance intermediaries have also been included under this provision, thereby strengthening regulatory compliance.

GST Exemption

GST exemption is granted on all individual life insurance policies and health insurance policies (including family floater) along with reinsurance w.e.f. 22 September, 2025. This measure enhances affordability for citizens, particularly underserved populations across rural and urban areas. The removal of the 18% GST lowers premium costs and encourages wider adoption.

Key Regulatory Reforms in Health Insurance

To streamline compliance, enhance transparency, and strengthen policyholder rights, IRDAI has introduced several regulatory reforms in the health insurance sector. These reforms seek to simplify the health insurance experience for customers by enforcing clear rules around product design, servicing, and claims.

  • Shortening of Moratorium Period: Moratorium period in health insurance is a fixed timeframe after which insurance companies cannot deny claims on the grounds of non-disclosure and misrepresentation, except on grounds of established fraud.  IRDAI reduced the moratorium period from 8 years to 60 months (5 years) in 2024. This strengthens the policyholder protection and enhances trust in the health insurance system.
  • Standardized 30-day free-look period: IRDAI introduced a standard 30-day free-look-period for policies with a term of one year or more. The free-look-period is the period given to a policyholder to assess and review the policy document. This consumer-friendly provision gives policyholders ample time to understand and assess their policies suitability.
  • Wider choices to policyholders: Recognizing the need for inclusive insurance, IRDAI has mandated the insurers to provide a wider choice to policyholders, considering their affordability. They must offer products, add-ons for all ages, regions, and occupational categories. Additionally, coverage should include medical conditions, disabilities, treatments, and systems of medicine (i.e. Allopathy/AYUSH), including all types of hospitals and healthcare providers.The goal is to increase insurance coverage and make policies flexible and affordable, such that more citizens—especially underserved groups—can access insurance protection.
  • No claim Bonus to policyholders: In order to reward policyholders who do not make any claim during the policy period, the insurer may offer a No Claim Bonus (NCB). Such NCB shall be provided, based on the policyholder’s choice or consent, either in the form of an enhancement in the sum insured and/or a discount on the renewal premium. The aim is to incentivise claim-free behaviour among policyholders by rewarding them with enhanced coverage or reduced renewal premiums.
  • Guaranteed policy renewal: To protect the interest of policyholders, policies must be renewed and cannot be denied on the basis of previous claims, except in cases of fraud or misrepresentation. This ensures continuity of insurance coverage and safeguards policyholders from denial of renewal based on past claims, except in cases of fraud or misrepresentation.
  • Grace Period for delay in premium payment: A grace period of 15 days (where premium is paid on a monthly instalments) and 30 days (where premium is paid in quarterly/half yearly/annual instalments) is available on the premium due date, to pay the premium. During this time, all policy benefits, such as sum insured, no claim bonus, and waiting periods, remain protected.
  • Migration and portability provisions: The policyholders can move between products or insurers while retaining accrued benefits such as waiting period credits and no-claim bonuses. This provides flexibility to the policyholders.
  • Third-Party Administrators (TPA) Performance Monitoring: To increase the accountability of TPAs, performance monitoring is done by insurers to ensure efficient and effective service delivery by them. It includes claw back of remuneration/charges paid to TPA basis customer feedback, which shall be passed on to the policyholders.
  • Premium Refund on Mid-Term Cancellation: In case of mid-term cancellation of the policy, insurers shall refund the premium or proportionate premium for the unexpired policy period. This ensures fairness and prevents misuse of the insurance system. For policies with a term of up to one year, such refund will be applicable only if no claim has been made during the policy period.

Major Insurance Protection Schemes

Reflecting its commitment to public welfare, the Government has introduced a comprehensive set of insurance measures to enhance financial security and social protection. These initiatives aim to improve insurance coverage, enhance affordability, and ensure wider access to risk protection across the country.

 

Life Insurance – Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY)

Launched in May 2015, the PMJJBY is a one-year term life insurance scheme renewable yearly. It provides life cover of ₹2 lakh to citizens aged 18–50 years, at an annual premium of ₹436, which is auto-debited from the subscriber’s bank account.  It aims to provide financial security and stability to families of the insured in case of untimely death, ensuring that no household faces sudden economic distress due to the loss of a breadwinner. The scheme has recorded 26.88 crore gross enrolments, with 10,45,450 claims disbursed as of February, 2026.

The policy is administered through the Life Insurance Corporation of India (LIC) and other life insurance companies. Death due to non-accidental causes during the first 30 days of enrolment is not covered, while accidental death is covered from day one.

Accidental Insurance – Pradhan Mantri Suraksha Bima Yojana (PMSBY)

PMSBY, launched in May 2015, is a accidental insurance scheme that provides accident and disability cover at an affordable premium, particularly for low-income and informal sector workers.

The scheme is available to all savings bank account holders aged 18 to 70 years. It provides accidental insurance coverage at an annual premium of ₹20, which is auto-debited from the linked bank account. Valid for one year (renewable annually), it offers risk coverage of ₹2 lakh in case of accidental death or full disability and ₹1 lakh for partial disability (as provided in the PMSBY rules).

The scheme has recorded 57.11 crore enrolments, with 1.76 lakh claims disbursed as of February 2026.It provides timely support to families affected by accidental deaths or disabilities, ensuring protection for economically vulnerable citizens.

Health Insurance – Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB-PMJAY)

Launched in September 2018, the scheme offers free health insurance coverage of up to ₹5 lakh per family per year for secondary and tertiary healthcare services. The scheme seeks to strengthen the healthcare system through interventions across prevention, promotion, and treatment at primary, secondary, and tertiary levels. It covers all pre-existing diseases from day one, places no restriction on age, gender, or family size, and provides nationwide portability across empanelled hospitals.

In September 2024, the government expanded the health coverage to all senior citizens aged 70 years and above, irrespective of income. As of 28 February 2026, a total of 43.52 crore Ayushman cards have been created under the programme, highlighting the recognition of the scheme among people.

Social Security – Employees’ State Insurance Scheme (ESI)

The Employees’ State Insurance (ESI) Scheme is a social security programme that provides protection to employees against contingencies such as sickness, maternity, disablement, and death due to employment injury, while also offering medical care to insured persons and their families. The scheme applies to factories and various establishments such as hotels, restaurants, cinemas, newspapers, shops, and educational and medical institutions registered under ESIC. As on 31 March 2025, the scheme covered 3.24 crore employees and 3.84 crore insured persons, including 83.1 lakh insured women, with a total of 14.91 crore beneficiaries receiving benefits under the programme.

Crop Insurance – Pradhan Mantri Fasal Bima Yojana (PMFBY)

Launched in February 2016, the scheme provides farmers with a simple, affordable, and comprehensive crop insurance. It covers against non-preventable natural risks such as droughts, floods, cyclones, hailstorms, pest attacks, and plant diseases. It also covers the entire crop cycle from pre-sowing to post-harvest, including losses during storage due to notified calamities. The scheme aims to provide timely financial support to farmers helping them manage risks and avoid falling into debt.

The scheme follows the principle of “One Nation, One Crop, One Premium,” ensuring uniform premium rates across the country. Farmers pay a maximum premium of 2% for Kharif food and oilseed crops, 1.5% for Rabi food and oilseed crops, and 5% for annual commercial or horticultural crops, with the remaining actuarial premium shared between the Central and State Governments. As of 13 March 2026, 93.98 crore applications have been received under the scheme, with claims amounting to ₹1,94,505.9 crore paid to farmers.

Together, these initiatives demonstrate the Government’s strong focus on creating an extensive and inclusive social security framework that protects citizens from life, health, and livelihood risks. By expanding coverage, enhancing affordability, and strengthening delivery mechanisms, these schemes are contributing to a more resilient society with improved financial protection across all sections of the population.

 

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India’s Silver Economy Emerges as ₹73,000 Crore Opportunity as Senior Citizens Double by 2050

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India’s “silver economy”, the ecosystem of goods and services catering to the elderly, is rapidly transitioning from a niche social welfare concern into a formidable economic driver, currently valued at approximately ₹73,000 crore ($8.8 billion) and poised for explosive growth in the coming decades.

With the country’s senior population projected to surge from 153 million in 2020 to 347 million by 2050—more than doubling in three decades—the sector is expected to expand at an annual rate of 20 percent, potentially reaching $50 billion by 2030, according to government and industry data .

This demographic shift, which will see the elderly share of India’s population climb from 11 percent to 21 percent by mid-century, is reshaping everything from housing and healthcare to financial services and technology adoption. The old-age dependency ratio is forecast to move from 16 percent in 2020 to 34 percent by 2050, fundamentally altering family structures and caregiving dynamics across the nation .

Senior Living Market Gains Momentum

The most visible manifestation of this transition is the booming senior living housing market, which is expanding at a compound annual growth rate of 17.4 percent. Industry research indicates the sector was valued at $3.55 billion in 2025 and is projected to reach $14.14 billion by 2031, registering a remarkable CAGR of 25.92 percent during the forecast period .

Major players including Ashiana Housing, Antara Senior Care, and Columbia Pacific Communities are aggressively developing age-friendly “lifestyle” projects, expanding beyond traditional southern strongholds into northern and western metropolitan regions. This geographic diversification is being encouraged by state-level incentives that reduce transaction costs for older buyers.

Independent living currently dominates the market with a 64.50 percent share, where residents purchase or rent units resembling standard apartments but benefit from emergency call systems, housekeeping, and recreational programs. Assisted living, though smaller, carries a 27.35 percent CAGR, with developers now creating “continuum-of-care” campuses where independent, assisted, and memory-care wings sit side by side—allowing residents to shift care levels without leaving familiar surroundings .

However, adoption faces cultural headwinds. The Longitudinal Ageing Study of India reports that 26.7 percent of urban elders now live alone, yet the Maintenance and Welfare of Parents and Senior Citizens Act 2007 reinforces expectations of at-home care. Current penetration of senior living communities stands at merely 1 percent, compared to 11 percent in the United Kingdom, suggesting vast headroom for growth despite lingering stigma .

Healthcare Transformation and Government Initiatives

The healthcare dimension of the silver economy is equally transformative. With over 75 percent of Indian seniors living with chronic diseases, demand for home-based medical services, telemedicine, wearable health trackers, and remote monitoring is rising sharply. The Ayush sector—Ayurveda and Yoga—is seeing increased demand for preventive care among health-conscious older adults .

The Union government has responded with significant policy interventions. The Ministry of Social Justice and Empowerment has launched the SAGE Portal, supporting startups developing elderly-care products with equity funding up to ₹1 crore, and the SACRED Portal, a digital platform helping citizens over 60 find re-employment opportunities .

Most significantly, the Union Cabinet recently approved expanding Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB PM-JAY) to provide free health coverage of ₹5 lakh per year for all senior citizens aged 70 and above, regardless of income. This groundbreaking move aims to benefit approximately 4.5 crore families containing six crore senior citizens .

“The eligible senior citizens will be issued a new distinct card under AB PM-JAY,” the Ministry of Health and Family Welfare announced. Senior citizens aged 70 and above belonging to families already covered under the scheme will receive an additional top-up cover of up to ₹5 lakh per year exclusively for themselves, which they need not share with other family members below 70 .

President Droupadi Murmu, addressing a joint sitting of Parliament in January, highlighted that during the past year-and-a-half, Vay Vandana cards have been issued to approximately one crore senior citizens, with nearly eight lakh receiving free treatment as hospital in-patients .

Budget 2026: Building Care Infrastructure

The Union Budget 2026-27 has doubled down on elderly care infrastructure, announcing that approximately one lakh allied health professionals will be added across ten disciplines—including optometry, radiology, anaesthesia, and applied psychology—over the next five years. The Union Health Ministry has been allocated ₹1,000 crore for the Scheme for Allied Health Care Professionals for the first time .

Additionally, a focused programme will train 1.5 lakh geriatric caregivers, addressing the rapidly rising long-term care needs of India’s elderly population. Finance Minister Nirmala Sitharaman stated that programmes aligned with the National Skills Qualifications Framework (NSQF) will be developed to train multi-skilled caregivers combining core care skills with wellness, yoga, and operation of medical devices .

“A strong care ecosystem, covering geriatric and allied care services will be built,” Sitharaman said while presenting the Budget. “In the coming year, 1.5 lakh caregivers will be trained” .

This workforce expansion addresses critical shortages. According to the Ministry of Health & Family Welfare’s National Health Workforce Accounts, India currently has about 12–13 lakh allied health professionals, while workforce assessments suggest the country requires at least 25–30 lakh to meet current and projected demand—implying a shortfall of over 10 lakh workers .

Financial Framework and Challenges

On the financial front, the Senior Citizens’ Savings Scheme remains a primary tool for steady returns, while Atal Pension Yojana enrolments have reached over 8.27 crore by late 2025. Budget 2026 discussions have proposed increasing the standard deduction to ₹90,000 from ₹75,000 to ease the tax burden on retirees, alongside a ₹10,000 crore Biopharma Shakti initiative to boost domestic medicine manufacturing, aiming for long-term affordability of chronic disease drugs .

Yet significant challenges persist. India produces fewer than 80 geriatricians annually, creating a critical workforce gap. Limited digital literacy hinders many seniors from accessing online health and financial services, while accessible public transport and “barrier-free” urban design remain underdeveloped outside major urban centers .

Writing in The Times of India, public health professional Pratima Kishore and geriatrician Dr. Abhishek Shukla noted: “District hospitals should have dedicated geriatric outpatient services. Primary health centres must be equipped to manage chronic disease follow-ups and frailty screening. Referral systems should be streamlined so that older adults are not left navigating fragmented services” .

They emphasized that “a significant proportion of elderly health needs do not require hospitalisation. They require assistance with mobility, medication management, nutrition, physiotherapy and basic daily activities. Without formal systems, this responsibility continues to fall on families, particularly women, who shoulder a disproportionate burden of unpaid caregiving” .

Market Outlook

Industry analysts project that meeting anticipated demand will require roughly 2.4 million new units designed for older residents by 2030 . Competition is shifting from small local operators to integrated real-estate and healthcare alliances that bundle preventive care, telemedicine, and social engagement services.

Technology adoption, particularly wearables that transmit blood pressure and glucose readings, is improving risk management and reducing liability insurance premiums for operators. Partnerships with tertiary hospitals provide visiting specialists, while tele-diagnostics reduce response time during medical events .

The Elderline national toll-free helpline (14567) continues to provide information, guidance, and emotional support to seniors across the country, complementing the growing ecosystem of formal elderly care services .

As India ages while still strengthening its public health and social protection systems—unlike many high-income countries that aged after becoming wealthy—the window for strategic intervention remains open. How the nation responds to its demographic transition will shape not only health outcomes but economic stability, gender equity, and family resilience in the decades ahead.

Insurance Revenue Last Year Doubles to Rs 100 Crore: Report

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Insurance sector has doubled its revenues in fiscal 2023-24 reaching Rs 100.28 crore, compared to Rs 48.74 crore in FY22-23, reports said.

Founded in 2016 by Ankit Agrawal and Ish Babbar, Gurugram-based insurtech platform Insurance Dekho that compares and offers  data on various types of insurance purchases, including motor, health, life, travel, and pet insurance, said in its report. It competes with established players like Acko and Policy Bazaar in India’s growing insurtech sector.

Insurance Dekho has raised a total of Rs 1,742.28 crore over two funding rounds, with its latest Series B round in October 2023 led by MUFG and BNP Paribas Cardif, valuing the company at over Rs 1,000 crore. In April 2023, the platform made strategic acquisitions of IRSS and Verak to expand its footprint.

The company’s financial performance in FY23 showed not only a surge in revenue but also a narrowing of losses. Its net loss reduced to Rs 51.59 crore from Rs 70 crore in FY22. Despite this improvement, Insurance Dekho’s expenses also climbed, reaching Rs 151.88 crore, driven largely by employee benefits, which accounted for over 50% of the total, followed by costs in advertising, finance, and legal services.

The platform’s key financial metrics remained in negative territory, with an EBITDA margin of -44.98% and a Return on Capital Employed (ROCE) of -15.28%, indicating continued challenges in profitability. However, the reduction in losses suggests a path toward greater financial stability as the company scales its operations.

The majority of Insurance Dekho’s shares are held by Amit Jain, who controls over 50%, alongside prominent investors such as West Street and TVS Shriram Growth AIF.

As the insurtech market in India continues to expand, Insurance Dekho’s robust revenue growth and strategic acquisitions position it for further success despite the current hurdles in profitability.

India Pushes for Digital Economy, Offers Incentives Galore

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To further accelerate the cashless economy, after the cancellation of old Rs.500 and Rs.1,000 notes, the Central Government has decided on a package of incentives and measures for promotion of digital and cashless economy in the country.
These incentives include:

1. The Central Government Petroleum PSUs will offer a discount at the rate of 0.75% of the sale price to consumers on purchase of petrol/diesel if payment is made through digital means. Nearly 4.5 crore customers buy petrol or diesel at such petrol pumps per day who can benefit from this. It is estimated that petrol/diesel worth Rs.1800 crore is sold per day to the customers out of which nearly 20% was being paid through digital means.

In the month of November 2016 it has increased to 40% and the cash transaction of Rs.360 crore per day have got shifted to cashless transaction methods. The incentive scheme has the potential of shifting at least 30% more customer to digital means which will further reduce the cash requirement of nearly Rs. 2 lakh crore per year at the petrol pumps.
2. To expand digital payment infrastructure in rural areas, the Central Government through NABARD will extend financial support to eligible banks for deployment of 2 POS devices each in 1 Lakh villages with population of less than 10,000.
These POS machines are intended to be deployed at primary cooperative societies/milk societies/agricultural input dealers to facilitate agri-related transactions through digital means. This will benefit farmers of one lakh village covering a total population of nearly 75 crore who will have facility to transact cashlessly in their villages for their agri needs.
The Central Government through NABARD will also support Rural Regional Banks and Cooperative Banks to issue “Rupay Kisan Cards” to 4.32 crore Kisan Credit Card holders to enable them to make digital transactions at POS machines/Micro ATMs/ATMs.
3. Railway through its sub urban railway network shall provide incentive by way of discount upto 0.5% to customers for monthly or seasonal tickets from January 1, 2017, if payment is made through digital means.

Nearly 80 lakh passengers use seasonal or monthly ticket on suburban railways, largely in cash, spending worth nearly Rs.2,000 crore per year.  As more and more passengers will shift to digital means the cash requirement may get reduced by Rs.1,000 crore per year in near future. All railway passengers buying online ticket shall be given free accidental insurance cover of upto Rs. 10 lakh.

Nearly 14 lakh railway passengers are buying tickets everyday out of which 58% tickets are bought online through digital means.  It is expected that another 20% passengers may shift to digital payment methods of buying railway tickets.  Hence nearly 11 lakh passengers per day will be covered under the accidental insurance scheme.

For paid services e.g. catering, accommodation, retiring rooms etc. being offered by railways through its affiliated entities/corporations to the passengers, it will provide a discount of 5% for payment of these services through digital means. All the passengers travelling on railways availing these services may avail the benefit.
4. Public sector insurance companies will provide incentive, by way of discount or credit, upto 10% of the premium in general insurance policies and 8% in new life policies of Life Insurance Corporation sold through the customer portals, in case payment is made through digital means.
5. The Central Government Departments and Central Public Sector Undertakings will ensure that transactions fee/MDR charges associated with payment through digital means shall not be passed on to the consumers and all such expenses shall be borne by them.  State Governments are being advised that the State Governments and its organizations should also consider to absorb the transaction fee/MDR charges related to digital payment to them and consumer should not be asked to bear it.
6. Public sector banks are advised that merchant should not be required to pay more than Rs. 100 per month as monthly rental for PoS terminals/Micro ATMs/mobile POS from the merchants to bring small merchant on board the digital payment eco system. Nearly 6.5 lakh machines by Public Sector Banks have been issued to merchants who will be benefitted by the lower rentals and promote digital transactions.  With lower rentals, more merchants will install such machines and promote digital transactions.
7. No service tax will be charged on digital transaction charges/MDR for transactions upto Rs.2000 per transaction.
8. For the payment of toll at Toll Plazas on National Highways using RFID card/Fast Tags, a discount of 10% will be available to users in the year 2016-17.