The G20 Global Partnership for Financial Inclusion document prepared by the World Bank has lauded the transformative impact of digital public infrastructure (DPI) in India in the past decade under the Modi government. The World Bank has noted that on the digital infrastructure front, India has achieved in just six years what would have taken about five decades.
The document highlights the groundbreaking measures taken by the government and the pivotal role of government policy and regulation in shaping the DPI landscape. DPI has had a transformative impact on India, extending far beyond inclusive finance, according to the document.
The document highlighted the groundbreaking measures taken by Modi government and the pivotal role of government policy and regulation in shaping the Digital Public Infrastructure (DPI) landscape. It notes the significant policy measures such as financial inclusion, Jan Dhan Aadhaar Mobile (JAM) Trinity, Pradhan Mantra Jan Dhan Yojana (PMJDY) and UPI.
“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,” the documents says.
The report notes the fact that the JAM Trinity has propelled financial inclusion rate from 25% in 2008 to over 80% of adults in last six years, a journey shortened by up to 47 years thanks to DPIs. It may be noted that since its launch, the number of PMJDY accounts opened tripled from 147.2 million in March 2015 to 462 million by June 2022 and women own 56 percent of these accounts, more than 260 million.
“The Jan Dhan Plus program 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. It is estimated that by engaging 100 million low-income women in savings activities, public sector banks in India can attract approximately ₹25,000 crore ($3.1 billion) in deposits,” the document says.
The report also acknowledges the fact that in the last one decade, India has built one of the world’s largest digital government-to-person transfer (G2P) architectures leveraging DPI. “This approach has supported transfers amounting to about $361 billion directly to beneficiaries from 53 central government ministries through 312 key schemes. As of March 2022, this had resulted in a total savings of $33 billion, equivalent to nearly 1.14 percent of GDP,” the report says.
On UPI, the World Bank document points out that more than 9.41 billion transactions valuing about ₹14.89 trillion were transacted in May 2023 alone. “For the fiscal year 2022–23, the total value of UPI transactions was nearly 50 percent of India’s nominal GDP. 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,” says the World Bank document.