Indian gov’t allocates $205m of its 2021 budget to boost digital payments

Sitharaman did not elaborate on how the funds would be utilized. However, during her presentation of the Union Budget for 2021-2022, she said there has been a “manifold increase” in digital payments in the country.

The incentive may boost the digital payments ecosystem in India, which includes the likes of Walmart-owned PhonePe, Google Pay, and Paytm.

This year’s union budget deals with the challenge of navigating the country out of an unprecedented recession through the allocation of resources to various segments amid a soaring unemployment rate.

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Unified Payments Interface (UPI) handled 2.23 billion transactions worth 4.16 trillion rupees in December 2020, breaching the 2 billion mark for the third straight month, according to data from the National Payments Corporation of India.

The finance minister had also omitted the merchant discount rate in January 2020. This meant that businesses with an annual turnover of more than 50 million rupees (US$684,000) were not to be levied a charge for offering digital payment options like BHIM UPI, Aadhaar Pay, and debit cards, among others.