Govt Earmarks Sops Worth INR 1,441 Cr To Promote Digital Payments

The Union government has earmarked incentives worth INR 1,441 Cr for the promotion of digital payments during the fiscal year 2023-24 (FY24).

Announced in the interim Budget 2024, the allocation will go towards the promotion of RuPay debit cards and low-value BHIM-UPI transactions (person-to-merchant). 

Interestingly, the number is 42% lower than the revised outlay of INR 2,485 Cr earmarked previously for FY24 under the incentive scheme. It has now been updated to the latest figure in the interim Budget 2024.

This is also 44% lower than INR 2,600 Cr worth of sops that were announced for the same purpose in FY23. 

“The proposal for continuation of the incentive scheme for promotion of digital payments for one year FY24, has been recommended by (the) Expenditure Finance Committee (EFC),” said the Budget implementation document. 

The initiative aims to incentivise fintechs for promoting UPI transactions below INR 2,000 as well as PoS and ecommerce transactions using RuPay debit cards. While there is no official clarity on the matter yet, the extended scheme is also expected to include UPI Lite and UPI 123PAY under its ambit. 

The move is part of the Centre’s bid to deepen the penetration of digital payments in the country. Meanwhile, UPI continues to gather steam across the country. The platform breached the 1,100 Cr mark in 2023, clocking a record 11,768 Cr transactions worth INR 182.84 Lakh Cr last year. 

Not just this, UPI transactions continued to soar in the first month of 2024 as well as it logged 1,220 Cr transactions worth INR 18.41 Lakh Cr in January 2024, up 52% and 42% respectively. 

This is part of parent National Payments Corporation of India’s (NPCI’s) aim of reaching 10,000 Cr monthly transactions on UPI in the near future.