Credit and Finance for MSMEs: The Union Cabinet on Wednesday approved a scheme worth Rs 2,600 crore for the promotion of RuPay debit cards and low-value BHIM-UPI (Bharat Interface for Money- Unified Payments Interface) transactions, as per a report by the Press Trust of India (PTI).
Under the scheme, the banks will be provided financial incentives to foster Point of Sale (PoS) devices and e-commerce transactions using RuPay and UPI in the ongoing financial year.
Also Read: Traders expect Rs 13 lakh crore business this wedding season: CAIT
The decision regarding the scheme’s announcement was made during a meeting of the Union Cabinet headed by Prime Minister Narendra Modi. “India’s strides in digital payments will be further strengthened by today’s Cabinet decision regarding promotion of RuPay Debit Cards and BHIM-UPI transactions,” Modi said in a tweet on Wednesday.
The scheme would help to build a robust digital payment ecosystem, and promote UPI Lite and UPI123PAY as economical and user-friendly digital payment options, the report added.
The scheme will also help in taking the digital payment system to MSMEs, the unorganised sector and farmers, said Union Minister Bhupender Yadav in an interaction with mediapersons after the cabinet meeting.
In December 2022, digital payment transactions through UPI reached a record high of 782.9 crore valuing Rs 12.82 lakh crore. “The approved incentive scheme for promotion of RuPay Debit Cards and low-value BHIM-UPI transactions (P2M) in FY 2022-23 has a financial outlay of Rs 2,600 crore,” an official statement noted.
Notably, the government in the financial year 2021-22 approved an incentive scheme conforming to the budget announcement to give a push to digital transactions. Taking it a step further, the government in FY 2022-23 announced to keep up with the financial support.
The country’s total digital payments transactions have registered a year-on-year (y-o-y) growth of 59 per cent, reaching Rs 8,840 crore in FY2021-22 from Rs 5,554 crore in 2020-21.
Similarly in FY2021-22, BHIM-UPI transactions registered a y-o-y growth of 106 per cent with Rs 4,597 crore, up from Rs 2,233 crore in FY2020-21.
The National Payments Corporation of India (NPCI) had sought incentivisation of BHIM-UPI and RuPay Debit Card transactions to create a cost-effective value proposition for ecosystem stakeholders. Further, it was sought to increase merchant acceptance footprints and faster migration from cash payments to digital payments, as per the release.