Odisha News Hour

Pandemic to Prosperity: Report from the Finance Ministry Claims Digital Infrastructure in India Empowers People and Drives Growth

<p>The success of the Digital Public Infrastructure (DPI) and its important role in providing services with a citizen-centric emphasis were highlighted in the Ministry of Finance’s recently issued report, “The Indian Economy – A Review,” which praised India’s digital transformation.</p>
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<p>The study pointed out that the government reacted quickly to the pandemic’s disruption of economic activity by using the power of India Stack, or digital public infrastructure. This digital backbone changed transactions that were previously thought to be laborious and contact-intensive by enabling online, cashless, paperless access to a variety of public and private services.</p>
<p>The services industry has seen a transformation thanks to India Stack, which consists of three linked layers: the Identity Layer (Aadhaar), Payments Layer (Unified Payments Interface, Aadhaar Payments Bridge, Aadhaar Enabled Payment Service), and Data Layer (Account Aggregator).</p>
<p><strong>IMPLICATIONS OF INDIA STACK</strong><br />
The majority of Indians now have a digital identity thanks to the identity layer, which is anchored by Aadhaar, greatly increasing financial inclusion. “Just one in 25 citizens had any form of formal identification prior to Aadhaar, and just one in four had bank accounts,” the research said.</p>
<p>Cashless transactions in the payments layer, which includes UPI, increased dramatically, rising from Rs 0.07 lakh crore in FY17 to an astounding Rs 143.4 lakh crore in FY24 (April-December 2023). Similar to this, the data layer changed the Know Your Customer (KYC) procedure, resulting in a Rs 5 reduction in e-KYC expenses from Rs 1000.</p>
<p>By January 10, 2024, 51.5 crore accounts had been reached via direct benefit transfers under the Pradhan Mantri Jan Dhan Yojana (PMJDY), which made use of India Stack. Through the elimination of duplicate beneficiaries and the plugging of leakages, the Direct Benefit Transfer (DBT) mechanism has transferred over Rs 33.6 lakh crore (December 2023), resulting in savings of Rs 2.7 lakh crore for the government.</p>
<p><strong>GLOBAL & NET-COMMERCE</strong><br />
The research also mentioned how important India’s digital infrastructure was to the pandemic, with programs like CoWin and Aarogya Setu helping to detect and control the infection. By using digital technology, the PM eVIDYA program filled in learning gaps during the epidemic and demonstrated how flexible India’s digital ecosystem can be amid emergencies.</p>
<p>It was also noted that more than 25% of India’s major non-grocery retail categories would be sold online by 2026, when the country’s e-commerce industry is expected to reach a valuation of $163 billion. India’s e-commerce industry has been propelled by the nation’s growing urbanization, the impact of the middle class, and the pervasive use of internet and cellphones.</p>
<p>Global recognition has been accorded to India’s digital prowess, according to the study. The advantages were highlighted in the International Monetary Fund’s Working Paper on India’s digital transformation, and ACI Worldwide names India as a global leader in real-time payment transactions.</p>
<p>It also said how the fintech industry has flourished in India because to the country’s constantly growing population, excellent DPI, and effective laws. After the US and the UK, India has the third-largest emerging fintech economy globally.</p>