India’s UPI ecosystem is at a crossroads. As transactions volume and value reach record levels, the government is gently pushing UPI players towards self-reliance. The clearest signal is that the central government’s incentive outlay towards UPI and RuPay in FY27 has shrunk to INR 2,000 Cr, even as the ecosystem has grown to new heights. UPI transactions recorded a 32.5% YOY growth in volume terms in 2025 at 228 Bn transactions as against 46.2% YOY spike in 2024 at 172 Bn transactions. With growing international presence, it’s not just the Indian market that has benefitted from this wave. So the fact that the central government is continuing to support this growth through public spending is great, right? It’s not as simple as that. As per Union Budget 2026 documents, the government spent INR 2,196 Cr for incentives for FY26, so at first glance the allocation for the forthcoming year seems more or less on par. But in the previous year’s budget, the central government had initially allocated INR 437 Cr for incentives. Effectively, it ended up spending 5X this figure in FY26. Despite knowing the gap in the allocation and actual spending in the previous year, the government is holding… Read MoreInc42 Media
