- NITI Aayog and Mastercard has released a report titled ‘Connected Commerce: Creating a Roadmap for a Digitally Inclusive Bharat’. The report identifies challenges in accelerating digital financial inclusion in India and provides recommendations for making digital services accessible to its 1.3 billion citizens.
- The report was released by NITI Aayog’s Vice Chairman Dr. Rajiv Kumar, CEO Amitabh Kant, and Ajit Pai, Distinguished Expert and Head, Economics and Finance Cell, along with Ravi Aurora, Senior Vice President and Group Head, Global Community Relations, Mastercard.
- Based on five roundtable discussions held in October and November 2020, the report highlights key issues and opportunities, with inferences and recommendations on policy and capacity building across agriculture, small business (MSMEs), urban mobility and cyber security. Experts from the government, banking sector, the financial regulator, fintech enterprises, and various ecosystem innovators participated in the discussions led by NITI Aayog and supported by Mastercard.
- NITI Aayog was a knowledge partner in this Endeavour. The series of workshops and the outcome report were curated by business advisory firm FTI Consulting. The report reflects the discussions held during the roundtables.
- In his opening remarks, Dr. Rajiv Kumar, Vice Chairman, NITI Aayog, said, “Technology has been transformational, providing greater and easier access to financial services. India is seeing an increasing digitization of financial services, with consumers shifting from cash to cards, wallets, apps, and UPI. This report looks at some key sectors and areas that need digital disruptions to bring financial services to everyone.”
Between October and November, experts discussed ways to accelerate digital financial inclusion, enable global opportunities for MSMEs, inspire trust and security in digital commerce, prepare India’s Agri-enterprises for connected commerce, and build robust transit systems for smart cities.
Key issues addressed during the knowledge series were:
- Acceleration of digital financial inclusion for underserved sections of Indian society.
- Enabling SMEs to ‘get paid, get capital and get digital’ and access customers, and ensure their continued resilience.
- Policy and technological interventions to foster trust and increase cyber resilience.
- Unlocking the promise of digitization in India’s agriculture sector.
- The essential elements of a digital roadmap to make transit accessible for all citizens.
“In the post-Covid era, building resilient systems and encouraging business models that could be change-makers of the future are crucial,” said Amitabh Kant, CEO of NITI Aayog. “India is emerging as the hub of digital financial services globally, with solutions like UPI growing tremendously and being hailed as instrumental in bringing affordable digital payment solutions to the last mile. Fintech players, alongside the conventional financial services providers, hold the key to transforming the way the economy functions and increasing access to credit for our industry. This will enable us to make the Indian digital financial landscape convenient, safe, and accessible to all.”
Key recommendations in the report include:
- Strengthening the payment infrastructure to promote a level playing field for NBFCs and banks.
- Digitizing registration and compliance processes and diversifying credit sources to enable growth opportunities for MSMEs.
- Building information sharing systems,including a ‘fraud repository’, and ensuring that online digital commerce platforms carry warnings to alert consumers to the risk of frauds.
- Enabling agricultural NBFCs to access low-cost capital and deploy a ‘phygital’ (physical + digital) model for achieving better long-term digital outcomes. Digitizing land records will also provide a major boost to the sector.
- To make city transit seamlessly accessible to all with minimal crowding and queues, leveraging existing smartphones andcontactless cards, and aim for an inclusive, interoperable, and fully open system such as that of the London ‘Tube’.
Digital Financial Inclusion Initiatives Taken in India
- Jan Dhan-Aadhar-Mobile (JAM) Trinity:
- The combination of Aadhaar, Pradhan Mantri Jan-Dhan Yojana (PMJDY), and a surge in mobile communication has reshaped the way citizens access government services.
- As per the estimates in March 2020, the total number of beneficiaries under Jan Dhan scheme have been more than 380 million.
- Expansion of Financial Services in Rural and Semi-Urban Areas:
- Reserve Bank of India (RBI) and National Bank for Agriculture and Rural Development (NABARD) have taken initiatives to promote financial inclusion in rural areas. These include:
- Opening of bank branches in remote areas,
- Issuing Kisan Credit Cards (KCC),
- Linkage of self-help groups (SHGs) with banks,
- Increasing the number of Automated Teller Machines (ATMs),
- Business correspondents model of Banking
- Payment Infrastructure Development Fund (PIDF) scheme, etc.
- Reserve Bank of India (RBI) and National Bank for Agriculture and Rural Development (NABARD) have taken initiatives to promote financial inclusion in rural areas. These include:
- Promotion of Secure Digital Payments:
- With the strengthening of the Unified Payment Interface (UPI) by National Payments Corporation of India (NPCI), digital payments have been made secure, compared to the past.
- The Aadhar-enabled Payment System (AEPS) enables an Aadhar Enabled Bank Account (AEBA) to be used at any place and at any time, using micro ATMs.
- The payment system has been made more accessible due to offline transaction-enabling platforms, like Unstructured Supplementary Service Data (USSD), which makes it possible to use mobile banking services without internet, even on a basic mobile handset.
- Enhancing Financial Literacy:
- The Reserve Bank of India has undertaken a project titled "Project Financial Literacy".
- The Objective of the project is to disseminate information regarding the central bank and general banking concepts to various target groups, including, school and college going children, women, rural and urban poor, defence personnel and senior citizens.
- Pocket Money is a flagship programme of Securities and Exchange Board of India (SEBI) and National Institute of Securities Market (NISM) aimed at increasing financial literacy among school students.
- The Reserve Bank of India has undertaken a project titled "Project Financial Literacy".
Comments
write a comment