Payment by Government Departments through e-payment
ON 31st March 2012, the Government issued a memorandum that with effect from 1st April 2012 all Ministries/Departments of the Government of India are directed to make all payments to private parties such as suppliers, contractors, grantee, loanee institutions etc. above Rs. 25,000 by payment advices, including electronically signed payment advices.
On 1st August 2016, the Government issued another memorandum reducing this limit to Rs. 10,000 stating,
"Since advancements in payment and banking technology have enabled a large number of transactions to be handled smoothly through the e-payment mode, the existing limit of Rs. 25,000/- prescribed in paragraph of this office O.M. dated 31st March 2012. has been further reviewed. It has now been decided to lower the threshold limit to Rs. 10,000/- in order to bring more payments under the purview of direct credit by electronic transfer to the bank account of the payee.
All Ministries/Departments of the Government of India are required with immediate effect to discharge all payments above Rs. 10,000 (Rupees Ten thousand only) to suppliers, contractors, grantee/loanee institutions etc. by issue of payment advices, including electronically signed-payment advices."
Now, the Government has further reduced the limit. A memorandum issued yesterday states,
In order to attain the goal of complete digitization of Government payments, the existing limit of Rs. 10,000/- prescribed in paragraph 2 of this office O.M. dated 1st August 2016 has been further reviewed. It has now been decided to lower the threshold limit to Rs. 5,000/- (Rupees five thousand only).
All Ministries/Departments of the Government of India shall ensure with immediate effect that all payments above Rs.5,000/- (Rupees five thousand only) to suppliers, contractors, grantee/loanee institutions etc. are made by issue of payment advices only.