MoS Rajeev Chaudrasekhar: India’s digital sphere is bound to play a major part in its growth story
Indian startups, innovators and companies would only be able to fulfill domestically-affordable contracts: MeitY MoS
After extensive discussions Rajeev Chandrasekhar will make the final call on MDR
On Wednesday, September 21st, Rajev Chandrasekhar, Minister of State (MoS for Electronics and Information Technology) (MeitY), stated that government is interested in helping bootstrapped startups by making policy decisions and infusing capital.
He also spoke on the third day at the Global Fintech Fest 2022 in Mumbai. He also stated that the government is considering providing preferential market access for startups just starting out to scale up their businesses.
Chandrasekhar noted that the Centre has been very clear about its approach and said that India’s digital sphere will be an important part of the country’s growth story. The MoS emphasized that Indian startups, innovators and companies would not be able to take advantage of domestic opportunities.
He also said that the policies would not be exclusive and would allow for Indian innovators as well as global companies. He also emphasized the “collaborative model” envisaged by government, which aims to provide an open environment for academia, industry and startups to exchange and address problems.
Chandrasekhar answered a question from Kunal Shah of CRED, stating that the government is focused to encourage joint intellectual property (IPs), and joint ownerships between Indian and foreign startups, particularly in deeptech.
On MDR, Innovation, Web3.0
Chandrasekhar stated that the Ministry of Finance would make the final decision on the merchant discount rate (MDR) question. However, he noted that the Ministry of Finance would make a final decision after extensive consultations.
Consultations are the basis of most policy decisions we make. This is a multi-disciplined issue (MDR). The MoS stated that if we decide to go in a different direction, it will only after extensive consultations with stakeholder input.”
A zero merchant discount rate is currently applied to UPI and RuPay transactions, as opposed to a majority digital payment systems in the nation. The government then subsidises some of the lost revenue through grants and other allocations.
UPI apps are struggling to make a profit amid these strict norms. Reports surfaced earlier this year of talks that suggested they were discussing raising MDR to 1.5%. The public reacted strongly to the news and FM Sitharaman clarified that UPI was not being charged MDR.
Chandrasekhar stated that his ministry is focused not only on innovation but also on the overall fintech system.
We are focused on innovation, but we want it to smell, talk, feel and look less like a “sandbox” and more like an active, growing, accessible, dynamic fintech ecosystem that is inoperability, orderly growth, and offers choice. The minister stated that all of these areas should be included in the fintech sector.
Chandrasekhar stated that India is at an inflection stage and urged young entrepreneurs to take advantage of the momentum generated by the government’s enabling policies. Chandrasekhar also encouraged startup founders not only to look at India’s consumer tech, but also to consider India’s data and emerging tech markets.
Chandrasekhar answered Shah’s question on Web3.0 and said that the government wanted to be the leader in the development of the internet’s future. “We want to participate in the roundtable that discusses standards and shapes the future, rather than being a consumer internet like we were for Web1.0 or Web2.0.”
He reiterated his position on the role of cryptocurrency in Indian economy and said that both the RBI and the Ministry of Finance will make a decision. He said that the “dark clouds” around crypto are likely to be a result of their effect on macroeconomy and not tech or innovation.