With the world’s largest immunisation drive already underway, economic recovery will be the major focus of the government. Despite the wreck created, the pandemic has offered a huge impetus to digital penetration all throughout the country, which has accelerated in the unlock phase. It is therefore critical the budget draws out bold policy interventions to strengthen digital infrastructure which will eventually help in digitising the overall economy.
The PoS terminal is financially, infrastructurally, and operationally far more affordable and far less demanding than an ATM. However, with just 4 million POS machines active in the country, the budget should consider making devices such as the PoS terminal/mini ATMs’ the most viable acquiring infrastructure for banks and fintech companies by offering incentives such as a tax subsidy.
Additionally, tax breaks in GST for merchants providing digital payments and tax benefits for companies helping build a digital infrastructure for friction-free digital onboarding too will catalyse the financial inclusion movement envisioned by the government.
The government should also consider a dedicated fund to strengthen the digital infrastructure of co-operative banks across the county which will offer a big boost to a more inclusive financial system. Budgetary concessions such as a GST waiver for digital transactions along with incentivization, especially in semi-urban and rural India will further augment cashless payments.
UPI has been a breakthrough, home-grown technology and it is important we replicate its success through newer and more innovative technologies. Fintechs and technology startups should be encouraged to invest more in R&D to introduce newer products and diversify into newer geographies. The upcoming budget should therefore consider offering tax benefits such as private investments being exempted.
Besides, considering the amount of data being created and stored across industries growing at unprecedented rates, enhancing the security infrastructure to protect and manage data seamlessly should be another focus area. In the post-COVID world, digital infrastructure will be a game-changer for companies and countries and therefore it is important we take timely measures to ride this wave.
The author is MD and Vice Chairman, Sarvatra Technologies. Views are personal.