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PLI-style push for software products planned; focus on digital payments

The domestic digital payments ecosystem has now been shortlisted and as a part of this effort, the IT Ministry will use the Rs 1,500 crore earmarked in Budget 2021-22 to augment safety and infrastructure of the digital payments systems, IT Secretary Ajay Prakash Sawhney said.

Written by Aashish Aryan | New Delhi |
February 15, 2021 4:15:07 am
Apart from the public digital payments instruments, home-grown private digital payments instruments also may get some support from the Centre.

After its Production Linked Incentive (PLI) scheme for mobile phone, allied components, computer-related hardware and other electronic products, the Ministry of Electronics and Information Technology has now turned its focus on the domestic support infrastructure for software products.

The domestic digital payments ecosystem has now been shortlisted and as a part of this effort, the IT Ministry will use the Rs 1,500 crore earmarked in Budget 2021-22 to augment safety and infrastructure of the digital payments systems, IT Secretary Ajay Prakash Sawhney said.

“Our effort will be to ensure that whatever needs to be done to promote the use, popularity, safety and infrastructure for digital payments will be done. We will work towards keeping the cost of digital payments low,” Sawhney told The Indian Express.

The Unified Payments Interface (UPI), which has received wide appreciation, will be a focus area for the Centre, especially with respect to the challenge of reducing transaction cots. The IT Ministry will be looking at supporting the existing public digital payment instruments present in the UPI ecosystem and enhancing their reach among masses, Sawhney said. “The MDR (merchant discount rate) for RuPay and UPI is already kept at zero. We will have to look at other ways in which we can keep the cost of transaction low. We are yet to formulate the exact scheme but there will be some support,” he added.

Apart from the public digital payments instruments, home-grown private digital payments instruments also may get some support from the Centre in the upcoming fiscal. While keeping the cost of transaction low will be a priority for the government, the ministry will also work at improving the acceptance infrastructure for digital payments systems, Sawhney said.

“Banks have already put in a lot of effort for PoS (point-of-sale) machines. We will be bringing the QR (quick-response) codes into a much larger pool of merchants. The aim will be bringing smaller merchants into the arena of acceptance of digital payments through these instruments such as PoS machines or QR codes,” he said, adding that the ministry would also look at ways to support startups that would bring other innovative products in this space.

To improve the acceptance of digital payments instruments, government systems such as booking of tickets in the public transport system such as buses and railways may start accepting payments thorough such instruments much more. “FASTag is a success model. We are looking at what else can do we by working with the concerned ministry to link such payments to digital payments infrastructure,” Sawhney said.

Fraudulent transactions, a major area of concern in the digital payments space, is also being looked at. The ministry will also reach out to other stakeholders, such as the Reserve Bank of India and National Payments Corporation of India, to work on ways which can stop such transactions.

The support for software products will extend beyond digital payments space to encourage startups and small companies to innovate in other areas such as language research. Over the last year, the IT Ministry has launched several programmes to identify and award home-grown products such as video calling, office productivity, social networking, e-learning, agri-tech, fin-tech, entertainment, and speech translation, among others.

These initiatives are likely to continue in the coming fiscal as well, Sawhney said, adding that speech translation and language technology research would be the focus.

“We are trying to pool whatever relevant data sets are there with us from our earlier projects, which are relevant for language technology as such. Those we are trying to bring into a national portal and make all those data sets available to everyone. We would be happy to see some of the large generators of such data including multi-nationals, join this effort and put up their data set in the national data repositories,” he said.

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