The government also said that those accepting digital payments will receive monetary rewards.
The central government on Thursday announced a Rs 5,000 crore special credit facility for street vendors as part of the economic package to counter to the financial fallout of the coronavirus crisis and the nationwide lockdown.
"There has been an adverse impact on the livelihoods of street vendors because of COVID-19. The government will launch a special scheme within a month to facilitate easy access to credit to street vendors," Finance Minister Nirmala Sitharaman said.
The scheme will provide up to Rs 10,000 as working capital and will support nearly 50 lakh street vendors, she added.
The government also said that those accepting digital payments will receive monetary rewards and more credit based on good repayment behaviour.
The credit line for street vendors is part of the government's Rs 20 lakh crore economic package announced by Prime Minister Narendra Modi on Tuesday.
Sharing details of the the package for the second day on Thursday, Finance Minister Nirmala Sitharaman announced measures to help migrant workers, street vendors, small traders and farmers.
The government said it will provide free foodgrains to crores of migrant workers hardest hit by the weeks-long lockdown and offer employment under a rural jobs programme.
The government will spend Rs 3,500 crore on food for nearly 8 crore migrant workers for the next two months, Ms Sitharaman told a news conference.
Lakhs of migrant workers were forced to return to their home states after they lost their jobs and were left without food or shelter following the sudden lockdown announced by the central government two months after the global coronavirus pandemic reached India.