The Indian government has finally acknowledged that something needs to change before the financial situation gets really out of hand in the Country. Their current plan involves offering subsidies for digital payments. Tax on low-value online transactions will be waived, and insurance policies will see rates slashed by 10%. Moreover, the government wants to promote the sale of rail tickets and payment of toll fees over the Internet. These are exciting changes that may arrive a little too late, though.
Indian Government Bets Big On Digital Payment Solutions
Ever since several cash banknotes in the country were deemed illegal, India has been going through a very turbulent period in the financial department. Finding a solution has proven to be quite challenging, and the government has only succeeded in making matters worse so far. Now that they are also confiscating gold and jewelry, it becomes more apparent that digital solutions are direly needed.
To bolster the switch to digital, the government is introduced several new plans to subsidize digital payments. Incentivizing the adoption of online payments is a good call, although this measure may come far too late. The trust relationship between consumers, business, and the government has been broken, and irreparable damage has been done.
That being said, these measures could have a positive impact on the country’s economy moving forward. All gas station card-based payments will see their balances discounted by 0.75%, which is quite significant. In doing so, the government hopes to take close to two trillion rupees out of circulation in the coming months.
India has quite the competitive mobile payments market, and the push for more digital solutions could spur future innovation. The number of mobile transactions has set new records every week over the past thirty days, which is a positive sign. But that doesn’t alleviate the cash issues that so many people are forced to deal with right now.
All of this can be seen as positive news for Bitcoin adoption, though. Local cryptocurrency exchanges have seen their fair share of success in the past few weeks, and their user bases continue to grow. Consumers and retailers are seeking out alternative financial solutions that cannot be taken away from them by banks or governments. Bitcoin fits that bill perfectly.
The coming months will be critical for the Indian economy, that much is certain. The new incentive by the government to push digital payments is a positive development in an ocean of terrible mistakes. It is not too late to turn the ship around just yet, but this new effort will have to pay off quickly.
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