World Bank Applauds India's Progress In G20 Document
The G20 document prepared by the World Bank lauds India’s remarkable progress in the realm of Digital Public Infrastructure (DPI). Over the past decade, India has seen a transformative impact brought about by DPIs, extending far beyond just inclusive finance. Here are some key highlights from the document:
Financial Inclusion
India’s DPI approach, particularly the JAM Trinity (Jan Dhan Yojana, Aadhaar, and Mobile), has significantly propelled financial inclusion. The percentage of adults with access to financial services has increased from 25% in 2008 to over 80% in just 6 years. This is a remarkable achievement that would have otherwise taken decades.
Jan Dhan Yojana (PMJDY)
Since its launch, the number of PMJDY accounts opened has tripled, with women owning 56% of these accounts. The Jan Dhan Plus program has encouraged low-income women to save, resulting in substantial increases in the number of women customers and average balances.
Government to Person (G2P) Payments
India has built one of the world’s largest digital G2P architectures using DPI, facilitating direct transfers to beneficiaries from central government ministries. This has resulted in substantial savings, equivalent to nearly 1.14 percent of GDP.
Unified Payments Interface (UPI)
UPI has become a central part of India’s digital payments ecosystem, with an impressive number of transactions and transaction value. In the fiscal year 2022-23, UPI transactions accounted for nearly 50 percent of India’s nominal GDP.
Private Sector Benefits
DPIs in India have also enhanced efficiency for private organizations, reducing complexity, cost, and time for business operations. Private sector players, including NBFCs, have experienced higher conversion rates, cost savings, and reductions in fraud detection costs.
Lower Costs and Compliance
The digitization of Know Your Customer (KYC) procedures through India Stack has significantly lowered costs for banks and made lower-income clients more attractive for services. Compliance costs have decreased, making it profitable for banks to develop new products.
Cross-Border Payments
The UPI-PayNow interlinking between India and Singapore, operationalized in February 2023, supports faster, cheaper, and more transparent cross-border payments, aligning with G20’s financial inclusion priorities.
Account Aggregator (AA) Framework
India’s AA framework aims to strengthen data infrastructure, enabling consumers and enterprises to share data with their consent. This regulated framework has enabled a large number of cumulative accounts for data sharing and raised consents.
Data Empowerment and Protection Architecture (DEPA)
India’s DEPA grants individuals control over their data, fostering tailored product and service access without requiring heavy investments from new entrants. This promotes innovation and competition.
These accomplishments highlight India’s leadership in leveraging digital infrastructure to advance financial inclusion, enhance private sector efficiency, and facilitate cross-border transactions. The G20 document recognizes the pivotal role of government policy and regulation in shaping this landscape under the Modi government.
