Money saved is money earned. For decades, India has witnessed reckless freebies handed out by political outfits to woo voters. However, such unsustainable giveaways burden the exchequer and slow down long-term development. Instead, a strategic approach that fosters efficiency and plug infrastructure gaps is the key to sustainable freebies. Here’s how the Modi government is revolutionizing cost savings for both the middle class and small businesses, not through handouts but through systemic reforms.
Bidding Farewell to Long Toll Queues
Remember the frustration of waiting in never-ending toll booth lines? Before 2017, the average wait time at Indian toll plazas was a staggering 714 seconds. The fuel wastage, vehicle wear-and-tear, and loss of productive time were taking a toll on both individuals and businesses. The response?
Instead of offering toll-free travel (a short-term, unsustainable solution), the government introduced FASTag – a technology-driven, long-term fix. FASTag employs RFID technology, allowing seamless toll payments, drastically cutting wait times to just 47 seconds in 2024.
The Economic Impact
- 5 billion toll transactions expected annually in FY 25-26
- 667-second reduction in wait time per vehicle
- 92.63 crore hours saved per year
- Annual fuel savings: Rs. 6,670 crore
- Vehicle maintenance savings: Rs. 667 crore
- Total savings: Rs. 7,337 crore, plus invaluable time!
A Digital Payment Revolution: UPI & Ru Pay
Have you ever noticed how developed countries rely on monopolistic entities like VISA and MasterCard, with expensive POS machines & MDR charges dictating transactions? For years, India simply copied this outdated model. But the lack of digital adoption was not because Indians love cash—it was because there wasn’t a suitable solution tailored to India’s unique needs.
Enter UPI & RuPay Cards. Before UPI (2016), India had just 25 lakh POS machines, limiting digital transactions to large businesses. Fast forward to 2023, and India boasts over 25 crore QR codes, making real-time digital payments accessible to all.
Financial Impact of UPI
- Total UPI transaction value (2024): Rs 275 lakh crore
- 60 per cent (Person 2 Merchant transactions) would have incurred MDR charges
- If merchants paid even 0.3 per cent in fees, they would lose Rs 82,500 crore annually
By introducing UPI, India effectively saves Rs. 82,500 crore every year—money that remains with small and medium businesses rather than going to foreign financial giants. Additionally, the digital payment ecosystem has led to:
- Lower theft & fraud risks
- Better access to loans for MSMEs
- Higher interest earnings for small businesses on bank deposits
- Despite the huge investments required to set up and maintain UPI infrastructure, the long-term savings for citizens and businesses far outweigh the costs.
Reforming Credit Access for MSMEs through credit guarantees
One of the biggest hurdles for small businesses in India has been the availability of affordable credit. Traditional banking systems often charge high interest rates on unsecured loans, making it difficult for MSMEs to grow. While loan waivers and subsidies were popular political tools, they failed to address the root cause—lack of structured, low-cost credit.
The government’s initiatives such as MUDRA loans, CGTMSE, digital credit scoring, and fintech integration have made borrowing more affordable and accessible for millions of small businesses. This shift not only saves entrepreneurs from exploitative interest rates but also fosters a self-sustaining economic environment.
Can you believe that government is now offering collateral free loans up to 100 crores to MSME and loans unsecured loan disbursal through CGTMSE has grown multi folds in last 10 years of Modi regime. Total 5.57 lakh crore loan guarantee to MSME has been given in last 10 years out of total 6.29 lakh crore since inception. If we assume a conservative interest saving of 2 per cent the total amount
The Bottom Line: Long-Term Gains Over Short-Term Freebies
India’s transformation under the Modi government is not about distributing unsustainable subsidies; it’s about creating a system where people save money organically. Whether through reducing toll congestion, eliminating foreign transaction fees, or making credit accessible to small businesses through government guarantees, these reforms ensure that every rupee saved is a rupee earned.
While the impact may not be as instantly visible as a freebie, the long-term financial benefits for individuals and businesses alike are undeniable.
Now, the question remains—do we want temporary relief, or do we embrace sustainable saving?
