New Delhi: The Union Cabinet on Wednesday approved a Rs 2,600 crore plan to promote RuPay debit cards and low-value BHIM-UPI transactions in an effort to increase the country's use of digital payments.

For encouraging Point of Sale (PoS) and e-commerce transactions using RuPay and UPI in the current fiscal year 2022-2023, banks will get financial incentives under this scheme.

The government stated in a statement that the programme would support the development of a strong digital payment ecosystem and would promote UPI Lite and UPI 123PAY as affordable and user-friendly digital payment options in keeping with the program's "Sabka Saath, Sabka Vikas" goal.

According to the government, digital financial transactions, which have grown significantly over time, have made it easier for enterprises to operate, notably small retailers, and have maintained social distance throughout the Covid-19 crisis.

The Center provided figures to support its claim that total digital payment transactions increased by 59% year over year, from 5,554 crore in FY2020–21 to 8,840 crore in FY202–21. Transactions using BHIM-UPI increased by 106% year over year, from 2,233 crore in FY2020–21 to 4,597 crore in FY202–21.

The current year's programme was developed in accordance with the announcement made in the 2022–23 Union Budget, in which Finance Minister Nirmala Sitharaman declared the government's intention to continue providing financial assistance for digital payments. In accordance with the FY2021-22 budget release, the government also established an incentive programme for that fiscal year in order to further promote digital transactions.

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