Digital Payments Surge to Rs 11 Trillion as New GST Rates Take Effect

India witnessed a massive surge in digital transactions as the revised Goods and Services Tax (GST) rates came into force on September 22. According to the Reserve Bank of India (RBI), digital payments soared to nearly Rs 11 trillion, marking a tenfold jump from the Rs 1.1 trillion recorded just a day earlier.

RTGS, NEFT and UPI Dominate Transactions

The RBI's Settlement Data of Payment Systems revealed that RTGS (Real Time Gross Settlement) led the spike, accounting for Rs 8.2 trillion, a staggering increase of over 4,000%.

• NEFT transactions followed with Rs 1.6 trillion.
• UPI transactions reached Rs 82,477 crore.
• Credit card payments jumped sixfold to Rs 10,411 crore, while debit card transactions rose nearly four times to Rs 814 crore.

Experts attribute the spike to a combination of revised GST slabs and festive season spending, with most goods now taxed at 5% and 18%, making them more affordable.

E-Commerce Sees Record Festive Start

E-commerce platforms reported a sharp boost in sales. A report by Redseer stated that online retail gross merchandise value (GMV) rose 23-25% year-on-year during the first two days of GST implementation (September 22-23). This was 4-5 times higher than the growth recorded in the opening days of the 2024 festive season.

The surge highlights how reduced GST rates combined with festive demand have encouraged consumers to spend more through digital channels.

Policy Push for Consumer Savings

Earlier this year, the Centre eased the income tax burden under the new regime, exempting households earning up to Rs 12 lakh annually from paying income tax. Prime Minister Narendra Modi, in an open letter this week, said that the combined effect of income tax relief and GST 2.0 reforms would save citizens nearly Rs 2.5 trillion.

He urged people to participate in a "GST Savings Festival" during the festive season by purchasing and selling locally made products. Modi emphasised that this would not only increase family savings but also boost job creation and support the 'Make in India' initiative.

Why It Matters

The record jump in digital payments reflects a broader shift towards cashless transactions, while also signalling positive consumer sentiment amid tax relief measures. With the festive season around the corner, policymakers expect higher spending to further fuel India's growth momentum.