Centre approves incentive scheme for digital transactions

In a press conference in New Delhi on Wednesday, the Union Cabinet 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.

The scheme will incur an annual cost of around 1,300 crore for a period of one year from April 1, 2021 to the year 2021.

The Prime Minister Narendra Modi-led Cabinet has announced that banks will be incentivize low-value up to 2,000 BHIM-UPI transactions by way of paying a percentage of the value of transactions.

The Cabinet stated that the scheme will facilitate the acquisition of banks in the building of a digital payment ecosystem, promote RuPay Debit card and BHIM-UPI digital transactions, and further deepening of digital payments in the country.

It will help in making accessible digital modes of payments to underbanked and marginalized populations, who are not included in the formal banking and financial system.

The Cabinet said that the scheme will further spur research and development and innovation in fintech space and will help the government in furthering digital payments in various parts of the world.

The scheme was first announced in the Budget 2021 -- 2022 to give a boost to digital transactions in the country.

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