Cabinet approves scheme to incentivise RuPay Debit Card, BHIM UPI transactions

The Union Cabinet has approved an incentive scheme for promotion of RuPay Debit Cards and low-value BHIM-UPI transactions to encourage digital transactions of small amounts, said I&B minister Anurag Thakur in a press conference in New Delhi on Wednesday.

The scheme will incur an expense of around Rs 1,300 crore for a period one year effective from April 1, 2021.

"Banks will be incentivised for Low-value (up to Rs 2,000) BHIM-UPI transactions by way of paying percentage of value of transactions," the Prime Minister Narendra Modi-led Cabinet announced.

This scheme will facilitate acquiring banks in building digital payment ecosystem and promoting RuPay Debit card and BHIM-UPI digital transactions, across all sectors and segments of the population and further deepening of digital payments in the country, the Cabinet stated.

It will also help in making accessible digital modes of payments to unbanked and marginalized populations, who are outside of the formal banking and financial system. 

In addition, "the scheme will further spur research and development and innovation in fintech space, and will help the government in further deepening of digital payments in various part of countries," the Cabinet added.

To be sure, the scheme was first announced in the Budget 2021-2022 to give further boost to digital transactions in the country.

Meanwhile, the Union Cabinet also approved Rs 76,000 crore Product-Linked Incentive (PLI) scheme for semiconductor and display manufacturing in a push to make the India a hub for electronics. The incentives include 25 per cent subsidy on capital expenditure for establishing semiconductor wafer fabrication units in the country.