Jan 30, 2024 8:21:01 p.m
The payments tier, including UPI, witnessed an increase in cashless transactions from Rs 0.07 billion in FY17 to an impressive Rs 143.4 billion in FY24 (April-December 2023).
The report notes that in the face of the pandemic disrupting economic activities, the government responded quickly and leveraged the strength of digital public infrastructure, commonly known as India Stack, to enable various public and private services online, paperless and cashless.
The Finance Ministry's recent report 'The Indian Economy – A Review' welcomed India's digital transformation and highlighted the success of digital public infrastructure (DPI) and its important role in delivering citizen-centric services.
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The report notes that the government responded quickly as the pandemic disrupted economic activity, leveraging the strength of the digital public infrastructure, commonly known as the India Stack. This digital infrastructure has facilitated paperless and cashless online access to various public and private services, transforming transactions that were once considered laborious and contact-intensive.
Comprised of three interconnected layers – the identity layer (Aadhaar), the payments layer (Unified Payments Interface, Aadhaar Payments Bridge, Aadhaar Enabled Payment Service) and the data layer (account aggregator) – India Stack has reshaped the services sector.
THE EFFECTS OF INDIA BATTERY
The identity layer anchored by Aadhaar has given digital identity to the vast majority of Indians, thereby significantly boosting financial inclusion. The report states: “Before Aadhaar, only one in 25 citizens had any form of formal ID and only one in four had a bank account.” »
The payments tier, including UPI, witnessed an increase in cashless transactions from Rs 0.07 billion in FY17 to an impressive Rs 143.4 billion in FY24 (April-December 2023). Similarly, the data layer has transformed the Know Your Customer (KYC) process and reduced the e-KYC cost from Rs 1,000 to Rs 5.
The Pradhan Mantri Jan Dhan Yojana (PMJDY) has driven direct benefit transfers with the help of India Stack and reached 51.5 Crore accounts on January 10, 2024. The Direct Benefit Transfer (DBT) mode has been transferred to Rs 33.6 lakh crore (December 2023), resulting in savings of Rs 2.7 million for the government by eliminating duplicate beneficiaries and plugging leakages.
PANDEMIC AND ELECTRONIC COMMERCE
Additionally, the report notes that India's digital infrastructure has played a crucial role during the pandemic and apps like Aarogya Setu and CoWin have helped track and contain the virus. The PM eVIDYA initiative, leveraging digital technology, bridged learning gaps during the pandemic and demonstrated the adaptability of India's digital ecosystem in times of crisis.
At the same time, it also highlighted that India's e-commerce sector is expected to reach $163 billion by 2026, with online sales accounting for over 25% of the country's key retail categories (excluding groceries). The e-commerce sector in India has been boosted by the country's increasing urbanization, middle class influence, and widespread use of smartphones and internet access.
The report said India's digital success has received global recognition. The International Monetary Fund's working paper on India's digital journey highlighted the benefits, while ACI Worldwide identifies India as a global leader in real-time payment transactions.
He also noted that India's rapidly growing population, world-class intellectual property rights and proactive regulations have supported the development of the fintech sector. India is the third largest emerging fintech economy in the world after the US and the UK.
Bhaswati Guha MajumderBhaswati Guha Majumder, Senior Correspondent at News18, has passionately reported on stories from Technology, Business (Infrastructure), Government etc
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