Credit and Finance for MSMEs: Even as digital payments witness momentum across the nation amid the Covid pandemic, the annual digital transactions for the MSME Ministry and its attached organisations have continued to decline for the third straight monetary year. The quantity of digital transactions for the ministry itself and its linked offices which includes Khadi and Village Industries Commission (KVIC), National Small Industries Corporation (NSIC), Office of the Development Commissioner (DC MSME), Coir Board, National Institute for Micro, Small and Medium Enterprises (NI-MSME), and Mahatma Gandhi Institute for Rural Industrialisation (MGIRI) stood at 33.76 lakh involving Rs 17,946 crore for the duration of FY21. This was down 19 per cent from 41.96 lakh digital transactions quantity to Rs 20,339 crore in FY20 and 31 per cent from 49.35 lakh transactions worth Rs 56,831 crore in FY19.
An evaluation of the information sourced from the MSME Ministry’s last 3 annual reports which includes FY21, having said that, showed that digital transactions’ share in the total transaction base went up from 82.47 per cent in FY19 to 84.65 per cent in FY20 and 87.44 per cent in FY21. The ministry had not reported digital transaction overall performance in its annual reports prior to FY19. While KVIC continued to dominate the digital transaction base in terms of volume for the 3 monetary years, the size of the transactions was highest for NSIC for the duration of the period. For FY21, KVIC reported 32 lakh digital transactions worth Rs 4,059 crore although NSIC recorded 69,938 digital transactions involving Rs 12,705 crore.
Comments from the MSME Ministry for this story have been not straight away readily available.
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“In line with the recommendations of Committee of Secretaries (CoS) and the guidelines of MeitY, a committee on Digital Payments has been constituted in the Ministry under the Chairmanship of Secretary (MSME) for making the Ministry and its attached offices achieve the successful implementation of ‘Digidhan Mission’,” the ministry mentioned in FY21 annual report.
The speedy-evolving digital payments segment in India, propelled by policy framework and technologies penetration, is most likely to develop at a compound annual development price of 27 per cent for the duration of the FY20-25 period. The development in retail electronic payment systems which includes National Electronic Fund Transfer (NEFT), mobile banking, and improvement of payment acceptance infrastructure is most likely to enhance digital payment transactions from Rs 2,153 lakh crore in FY20 to Rs 7,092 lakh crore in FY25, according to the India Trend Book Report 2021 by the Indian Private Equity and Venture Capital Association (IVCA) and Ernst & Young.
Meanwhile, India’s UPI transaction base grew more than threefold in April to Rs 4.93 lakh crore along with a 2.6x boost in volume to 2.64 billion from the year-ago period, according to the information from the National Payments Council of India. However, there was a month-on-month decline of 3.3 per cent in volume from 2.73 billion in March 2021 and 2.2 per cent contraction in worth as properly from Rs 5.04 lakh crore in March 2021.