In a move to further accelerate India’s digital payments ecosystem, the Union Cabinet has approved a ₹1,500 crore incentive scheme aimed at promoting small-value BHIM-UPI transactions up to ₹2,000 during the financial year 2025. This initiative aligns with the government’s broader agenda to enhance financial inclusion and reduce dependency on cash transactions.
Key Cabinet Decisions
Apart from the BHIM-UPI incentive scheme, the Cabinet also approved several crucial projects across different sectors, as highlighted in the latest meeting:
1. Infrastructure & Dairy Development:A project will be developed on BOT (Build-Operate-Transfer) mode at a capital cost of ₹4,500 crore.Approval for the Revised Rashtriya Gokul Mission with enhanced allocation for 2024-25 and 2025-26.Approval of the Revised National Program for Dairy Development with an additional ₹1,000 crore, bringing the total budget to ₹2,790 crore.
2. Fertilizer & Agriculture Growth:
Approval for a gas-based urea plant in Assam.A new Brownfield Ammonia-Urea Complex (Namrup IV Fertilizer Plant) will be established within the premises of Brahmaputra Valley Fertilizer Corporation Ltd.The total project cost is estimated at ₹10,601 crore with a 70:30 debt-equity ratio through a joint venture, expected to be completed in four years.
3. Road & Highway Development
Approval for the construction of a six-lane access-controlled Greenfield Highway from JNPA Port (Pagote) to Chowk in Maharashtra.
How the BHIM-UPI Incentive Scheme Will Work:The ₹1,500 crore fund will be used to incentivize banks and payment service providers to support small-value digital transactions.The scheme will focus on transactions up to ₹2,000, ensuring that digital payments become more accessible for small businesses and individuals.By reducing the cost burden on banks and merchants, this initiative is expected to drive further adoption of digital transactions, particularly in rural and semi-urban areas.
Impact on India's Digital Economy
With UPI already being a dominant player in India's digital payments ecosystem, this scheme is expected to:Further increase transaction volumes, especially in lower-value segments.Encourage local vendors, small businesses, and daily wage earners to transition toward digital payments.Strengthen India’s position as a global leader in fintech and digital transactions.
This decision, along with other infrastructure and economic initiatives, highlights the government’s commitment to modernizing India’s economy and improving financial accessibility.
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