Moneycontrol Pro Panorama | Digital public good, at whose expense?

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After all the hullabaloo over levying charges for the hitherto free unified payments interface (UPI), the Ministry of Finance put the matter to rest, at least for now. Their reason: the financial platform is a “digital public good” (DPG).
The UPI transactions are quickly spreading across the financial ecosystem and finding huge acceptance among businesses and customers. The technology enables a customer to not only shop but also set recurrent transactions such as mobile and electricity bills, insurance and mutual funds payment, loan EMIs and entertainment subscriptions. It scores over credit/ debit cards and bank transactions because UPI is free for all customers, the merchant and the app service provider.

But there is a cost involved in the process. And, as the service is increasing in popularity, the associated costs are also increasing. Who bears this cost? For now, the government provides a certain sum to promote digital payments and support the system. Is this model sustainable and for how long? A column by Prosenjit Datta points out that UPI’s rising popularity is also making it expensive and the government will be forced to rethink its free-for-all strategy even though it's a digital public good.

Indeed, fintech disruptions are challenging policy makers and regulators. The Reserve Bank of India’s new digital lending norms, which aimed to set a framework for digital lending have been criticised as being toothless. It could be business as usual for many rogue digital lenders, argues Indrajit Basu.

While fintechs have paved the way for financial inclusion, issues such as cost of services, data privacy, transparency and the rise of fly-by-night operators will come to haunt regulators sooner than later. It calls for a fine act of balancing between tighter norms and transparency on the one side and ensuring growth of digital financial instruments on the other.

Meanwhile, in the tangible and concrete world of manufacturing, there are debates on whether the green shoots of revival visible in private sector capital expenditure are sustainable this time, after a decade of sluggishness. Going by projects announced, recovery in the sector looks to be below pre-pandemic levels. But there’s hope on the horizon.

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Keeping UPI free is becoming an expensive affair

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India’s noose for rogue digital lenders not tight enough

Private capex still below pre-pandemic levels, but there’s reason for optimism

Another brick in the Wall Street as Blackstone seeks Pink Floyd catalogue (republished from the FT)

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China’s influence in Sri Lanka is worrisome but India must not stop financial aid

Lok Ayukta | In Kerala, the Left government is drawing its own iron curtain

Technical Picks: RBL, NTPC, Asahi India Glass, Indraprastha Gas, Castor seed and USD-INR (These are published every trading day before markets open and can be read on the app).

Vatsala KamatMoneycontrol Pro