What is the new outlay for the UPI and RuPay incentive scheme in FY27?

The new outlay for the UPI and RuPay incentive scheme in FY27 is ₹2,000 crore.

How does the FY27 outlay compare to FY26 for UPI and RuPay incentives?

The FY27 outlay of ₹2,000 crore is a reduction of nearly 10% from the FY26 revised estimate of ₹2,196 crore.

What impact might the reduced funding have on India's digital payments?

The reduced funding, coupled with a zero merchant discount rate on UPI, could potentially stifle growth and impact the ability of fintechs to onboard new users and expand digital payment acceptance.

Home / Business and Economy / Govt Reduces UPI & RuPay Scheme Outlay by 10%

Govt Reduces UPI & RuPay Scheme Outlay by 10%

1 Feb

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Summary

Government cut UPI and RuPay incentive scheme outlay by 10% for FY27.
Outlay for FY27 is set at ₹2,000 crore, down from FY26's ₹2,196 crore.
This signals a potential shift in government support for digital payments.

Govt Reduces UPI & RuPay Scheme Outlay by 10%

The central government has significantly decreased the financial outlay for its incentive scheme promoting transactions on Unified Payments Interface (UPI) and the homegrown RuPay card network. For the next financial year, FY27, the allocated budget is ₹2,000 crore, a reduction of nearly 10% from the revised estimate of ₹2,196 crore for FY26.

This decision marks a notable shift, especially as transaction volumes for UPI and RuPay continue to surge. The incentive scheme subsidizes low-value person-to-merchant UPI transactions and RuPay debit card usage. Industry experts suggest this move might signal a reversal from previous support, despite the Reserve Bank of India not extending its own Payments Infrastructure Development Fund (PIDF) scheme.

Concerns have been raised that the reduced funding, coupled with a zero merchant discount rate (MDR) on UPI, could stifle growth. While the government considers UPI a public good, discussions around introducing tiered charges for larger merchants are resurfacing. This could impact the ability of fintechs to onboard new users and expand digital payment acceptance in rural areas.