When the Union Budget was announced by the Finance Minister Shri Arun Jaitley on 1st February 2017, the key take away was the willingness of the Government to push India towards Digital Economy. A few important measures were announced in the budget which will help India in advancing towards an economy based on the digital payments, digital services, etc. The idea of Digital economy itself has gained importance in the public discourse post Demonetization where the thrust was upon going cashless. Going digital will create an environment of speedy, transparent and accountable governance and helps in fighting the problems of corruption, black money and terror funding.
The important announcements made in the regard of creating a digital economy were:-
- 125 lakh people have adopted the BHIM App so far. The Government will launch two new schemes to promote the usage of BHIM; these are Referral Bonus scheme for individuals and a Cashback scheme for merchants. This step will help in more and more adopting the BHIM way to go for digital payments and also motivate people to use wallets and other Apps. It will overall promote the development scenario for digital payments.
- Aadhaar Pay, a merchant version of AEPS (Aadhaar Enabled Payments System) will be launched shortly and definitely provide the much needed momentum in the digital payments and FinTech sector.
- A mission will be set up with a target of 2500 crore digital transactions for 2017-18 through UPI, USSD, Aadhaar Pay, IMPS and Debit Cards. The mission can bring in the required behavioral changes in the way customer pays up for buying a product.
- A proposal to bring mandate all the Government receipts through digital means, beyond a prescribed limit is under consideration. When the Government itself leads by example then citizenry can be expected to follow the new scheme of things.
- Banks have targeted to introduce additional 10 lakh new POS terminals by March 2017. They will be encouraged to introduce 20 lakh new Aadhar based POS by September 2017. It will provide the rural India with digital connectivity and enable them to be part of financial and digital inclusion.
- The Government has proposed to create a Payments Regulatory Board in the Reserve Bank of India by replacing the existing Board for regulation and supervision of Payments and Settlements system. A newly energized Board with a embedded vision of spearheading Digital Economy can turn the tides in favor of Digital payments.
All the above steps and the additional focus of the Government on Digital India along with Startup India, Skill India and Make in India will help in accelerating the process of creating a Digital economy very soon. We should be ready to embrace the change and see our country going digital in Indianized way!
Abhishek Ranjan is a Research and Policy Analyst to Members of Parliament (MPs) Mr. Ninong Ering and Mr. Dilip Tirkey. He is also working as a Consultant to University of Chicago’s Delhi Center for Anubhav Lecture Series, and is a Policy Consultant for FinTech startup Credy. Earlier, he was a LAMP Fellow and graduated in Engineering from Manipal Institute of Technology.