These smartphones are a threat to Reliance Jio

As the government asked local handset players like Micromax, Lava, Intex and Karbonn to develop sub-Rs 2,000 smartphones with capabilities to “scan for Aadhaar-based financial transactions” and eventually carry out digital payments with ease.

Karbonn and Intex, two homegrown manufacturers, have said that they are "in a position" to meet the low-price criteria - spelled out recently by NITI Aayog - but "it depends on variables" such as size of the order and the government's advocacy to push the products.

As the government pushes digital payments agenda in line with demonetisation efforts, smartphones are being perceived as key instruments to drive home the point of Digital India but it doesn’t intend to subsidize the cost of smartphones. Instead, it wants the smartphone companies to come with solutions to bring down the prices.

However, Reliance Jio also planned 4G feature phones that are touted to be the cheapest 4G phones in the world, and may cost between Rs 1000 to Rs 1500.

The push for cheaper smartphones is also coming at a time when telecom regulator Trai has floated a consultation paper which talks about providing 100 MB of free monthly internet data to those living in rural areas.