'India has achieved in 6 years what would have taken 5 decades': G20 report by World Bank lauds Digital Public Infrastructure
Report highlights pivotal role of government policy and regulation in shaping the DPI landscape
India has achieved in just 6 years what would have taken about five decades, says the G20 Global Partnership for Financial Inclusion document prepared by the World Bank.
Lauding the transformative impact of Digital Public Infrastructure (DPIs) in India over the past decade under the Central Government, the document highlights the groundbreaking measures taken by the Central Government and the pivotal role of government policy and regulation in shaping the DPI landscape.
Here are some key points from the G20 Policy Recommendations for Advancing Financial Inclusion and Productivity Gains Through Digital Public Infrastructure.
1. Jan Dhan-Aadhaar-Mobile, or the JAM Trinity, has propelled the financial inclusion rate from 25% in 2008 to over 80% of adults in the last 6 years, a journey shortened by up to 47 years thanks to Digital Public Infrastructure (DPIs).
2. The document categorically notes, “While DPIs’ role in this leapfrogging is undoubtable, other ecosystem variables and policies that build on the availability of DPIs were critical. These included interventions to create a more enabling legal and regulatory framework, national policies to expand account ownership, and leveraging Aadhaar for identity verification.”
3. Since its launch, the number of Pradhan Mantri Jan Dhan Yojana (PMJDY) accounts opened tripled from 147.2 million in March 2015 to 462 million by June 2022; women own 56 percent of these accounts, more than 260 million.
4. The Jan Dhan Plus programme encourages low-income women to save, resulting in over 12 million women customers (as of April 2023) and a 50% increase in average balances in just five months, as against the entire portfolio in the same time period.
5. It is estimated that by engaging 100 million low-income women in savings activities, public sector banks in India can attract approximately Rs 25,000 crore ($3.1 billion) in deposits.
GOVERNMENT TO PERSON (G2P) PAYMENTS
1. In the last decade, India has built one of the world’s largest digital G2P architectures leveraging DPI.
2. This approach has supported transfers amounting to about $361 billion directly to beneficiaries from 53 Central government ministries through 312 key schemes.
3. As of March 2022, this had resulted in a total savings of $33 billion, equivalent to nearly 1.14 percent of GDP.
UNITED PAYMENTS INTERFACE (UPI)
1. More than 9.41 billion transactions valuing about Rs 14.89 trillion were transacted in May 2023 alone.
2. For the fiscal year 2022–23, the total value of UPI transactions was nearly 50 percent of India’s nominal GDP.
On Cross-Border Payments, the G20 document says that the UPI-PayNow interlinking between India and Singapore, operationalised in February 2023, aligns with G20's financial inclusion priorities and facilitates faster, cheaper, and more transparent cross-border payments.
It also acknowledges the role played by India Stack in digitising and simplifying Know Your Customer (KYC) procedures, lowering costs; banks that use e-KYC lowered their cost of compliance from $0.12 to $0.06. The decrease in costs made lower-income clients more attractive to service and generated profits to develop new products, the document says.