Budget 2023-24: Government Reduces Subsidies for Fintechs and Banks on UPI Transactions

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The government has cut down the subsidy meant for compensating fintech startups and banks that facilitate UPI transactions in its Union Budget 2023-24 announcements.

The government has reduced the incentive allocation for fintechs and banks by nearly 30%, from INR 2,137 Cr in the previous budget to INR 1,500 Cr. In fact, the government only set aside INR 200 Cr as a subsidy to compensate UPI players in the 2021-22 budget. However, industry stakeholders, including the Reserve Bank of India (RBI), have warned that the move could harm UPI growth. As a result, the government increased the incentive scheme’s budget by more than tenfold in 2022-23.

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Budget 2023-24: Government Reduces Subsidies for Fintechs and Banks on UPI Transactions

The government has cut down the subsidy meant for compensating fintech startups and banks that facilitate UPI transactions in its Union Budget 2023-24 announcements.

The government has reduced the incentive allocation for fintechs and banks by nearly 30%, from INR 2,137 Cr in the previous budget to INR 1,500 Cr. In fact, the government only set aside INR 200 Cr as a subsidy to compensate UPI players in the 2021-22 budget. However, industry stakeholders, including the Reserve Bank of India (RBI), have warned that the move could harm UPI growth. As a result, the government increased the incentive scheme’s budget by more than tenfold in 2022-23.

Disclaimer

We strive to uphold the highest ethical standards in all of our reporting and coverage. We StartupNews.fyi want to be transparent with our readers about any potential conflicts of interest that may arise in our work. It’s possible that some of the investors we feature may have connections to other businesses, including competitors or companies we write about. However, we want to assure our readers that this will not have any impact on the integrity or impartiality of our reporting. We are committed to delivering accurate, unbiased news and information to our audience, and we will continue to uphold our ethics and principles in all of our work. Thank you for your trust and support.

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