The World Bank has praised the transformative effects of India’s Digital Public Infrastructures (DPIs) during the past ten years under the leadership of Narendra Modi. The Modi administration’s initiatives were emphasised in the document, which the World Bank created as part of the G20 Global Partnership for Financial Inclusion. It also made clear how important government regulations and policies are in influencing the DPI landscape.
India’s development
The study highlights India’s quick development in financial inclusion as one of the report’s outstanding accomplishments. The Jan Dhan Yojana (JAM) Trinity, which consists of the Pradhan Mantri Jan Dhan Yojana (PMJDY), Aadhaar, and mobile numbers, has been significant in raising the percentage of people who have access to financial services. According to the research, India has rapidly increased its adult financial inclusion rate from 25% in 2008 to over 80% in just six years. This enormous step forward reduced the time it took to achieve financial inclusion by up to 47 years, an accomplishment entirely attributable to DPIs.
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While the importance of DPIs in this leapfrogging is undeniable, other ecosystem factors and regulations that depend on the availability of DPIs were crucial, the document states. These included using Aadhaar for identity verification, national strategies to increase account ownership, and measures to develop a more enabling legal and regulatory framework.
The DPI in India has improved efficiency for commercial businesses in addition to the governmental sector. Some Non-Banking Financial Companies (NBFCs) reported an increase in SME lending conversion rates of 8%, a 65% drop in depreciation costs, and a 66% drop in fraud detection expenses.
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UPI’s success
The research emphasised the Unified Payments Interface (UPI) in India’s amazing success, with over 9.41 billion transactions valued at over 14.89 trillion in just May 2023. The entire amount of UPI transactions during the fiscal year 2022–2023 came close to 50% of India’s nominal GDP.
In keeping with the G20’s aspirations for financial inclusion, the UPI-PayNow interlinking between India and Singapore became active in February 2023 and permitted quicker, less expensive, and more transparent cross-border payments.
