Digital: A revolution in the making in India

September 2016

The key for digital economy is digital banking and finance systems which will need digital literacy and high trust factor. Accordingly, the publication delves into different aspects of the development of a digital society and looks at the technology adoption and related challenges.

We believe that the growth and development agenda for the next few decades should not only focus on economic progress to cater to rising aspirations of young Indians but also in achieving that in a sustainable manner. To this end, the technical and managerial capabilities of public and private sector, under the comprehensive framework of Digital India, can be leveraged to take India into the digital age.

1. JAM: Jan Dhan 240M+, Aadhaar 1B+, Mobile 1B+

JAM Trinity is the next big reform for direct subsidy transfer to the Indian citizens. The economic empowerment of citizens demands a continuous connect between the citizens and the government. For a successful service provision model, the government needs to identify the citizens, create a platform for transfer of services and ensure last mile delivery of services to the underprivileged. Seamless integration between Jan Dhan, Aadhaar and Mobile will help in the Direct Benefit Transfer but needs some reforms in the financial ecosystem.

2. 4G, fiber and satellite: Providing seamless connectivity

Optic fiber has emerged as the dominant technology across wholesale infrastructure while wireless broadband dominates at the access level. The slow pace of fiber deployment can create impediments in multiple growth initiatives. These challenges need to be addressed suitably to realize the vision of digital India.

3. Technology innovation: Boosting rural, women, governance

The rapidly changing economic and social landscape in India requires continuous investments in physical, digital, and policy infrastructure.

Economic growth and demographic dividend present an unprecedented opportunity for India in the global economy in the coming decades:

  • Robust consumer sector: India’s consumer market is expected to grow 3.6 times from 2010 to 2020
  • Rapid urbanisation: 38% of India is expected to be urbanized by 2025; 49 metropolitan clusters are expected to account for 77% of India’s incremental GDP
  • Thriving market for talent: As per a NASSCOM report, almost half the Fortune 500 companies are expected to be based in emerging markets
4. Digital wallets, payment banks, UPI: Moving to cashless

Increased innovation and acceptance of digital payments is resulting in greater digital banking activities. At different stages of conceptualization, these payment mechanisms face challenges in varying degrees and nature.

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