Budget 2017 – Digital Payment Thrust to Help MSMEs


The Budget of India has propelled the digital economy after announcing demonetisation last year. According to the Finance Minister of India, Mr Arun Jaitley, promotion of digital economy will clean up the system, weed out corruption and black money, and the Indian government will soon launch an Aadhaar-based payment system to promote digital transactions for people living in hinterlands. This will certainly benefit MSMEs operating in the hinterland.

He announced in the Budget that a merchant enabled Aadhaar payment system will be launched shortly. This will specially benefit those those who do not have debit cards, mobile wallets or mobile phones. Promotion of digital economy is an integral part of Indian Government’s strategy, the minister said, adding that it has a transformational impact in terms of greater formalisation of the economy and mainstreaming the financial system into the budget system.

This, in turn, is expected to energise private investment in the country through lower cost of credit. India is now at the cusp of a massive digital revolution. A shift to digital platform has huge benefits to the common man,” the Indian finance minister said.

He also said that the new digital application–BHIM , that was launched last month, is doing very well and is unleashing the power of mobile phones for making digital payments and financial inclusion.

He told the members of Indian Legislature (Parliament) that 125 lakh people have adopted the new app so far, and the Indian Government will launch two new schemes to promote the use of BHIM. These are referral bonus schemes for individuals and a cashless scheme for merchants.