The government has been consistent, over the last few months, about its intention to usher India into a digitally enabled and driven economic system. Arun Jaitley’s presentation of the Union Budget on Tuesday announced a slew of measures to hasten the move — including a Rs 3 lakh cap on cash transactions, setting up of a Payments Regulatory Board under RBI and a Computer Emergency Response Team to deal with cyber security issues.
The finance minister has also removed all duties on devices used in the process of cashless transactions, including point of sales machines and biometric readers. An all-time high allocation of Rs 745 crore has been made towards schemes like Modified Special Incentive Package Scheme (M-SIPS) and the Electronic Development Fund (EDF) to incentivise electronic manufacturing.
“We welcome the duty exemptions on iris enabled PoS devices, and are truly excited about the strong emphasis the government has placed on Aadhaar enabled payment initiatives,” said Vivek Khandelwal, Vice President, Delta ID, a global supplier of iris recognition equipment.
Such incentives are set to help the government achieve its aims of bolstering the woeful digital payment infrastructure on the ground — specially PoS machines. “Banks have targeted introduction of an additional 10 lakh PoS terminals by March 2017, and will be encouraged to introduce 20 lakh Aadhaar-based PoS by September 2017,” Jaitley said.
Also announced is a merchant-enabled Aadhaar payment system that Jaitley said will be launched soon. “This will specially benefit those who do not have debit cards, mobile wallets or mobile phones,” he said.
Another vector through which the government is pushing digital adoption is by promoting the use of mobile payment systems. Two new schemes, one a referral scheme for individuals and another a cashless scheme for merchants on the BHIM app, are set to be launched. A mission is also set to be established to achieve a target of 2,500 crore digital transactions for 2017-18 through UPI, USSD, Aadhaar Pay, IMPS and debit cards.