Sep 23: Digital India – Financial Inclusion – https://youtu.be/-F88ooM-j4s
Technology has had a disruptive effect on the delivery of financial services, and adoption of digital solutions could help accelerate financial inclusion.
Financial inclusion refers to the access to financial services like savings, insurance, credit etc. In line with SDG 1, to end global poverty, financial inclusion will be key. The 2030 Agenda seeks to guarantee human beings, especially those in vulnerable situations, the right to financial services, including microfinancing. Digital financial inclusion is defined as digital access to and the use of formal financial services by the unserved and underserved population at an affordable cost (Lauer and Lyman 2015).
Traditionally, the costumers had to visit the physical banks to perform their business with banks (transactions, withdrawal, etc.). However, after the ICT revolution, the banking services are available via IT and ITES. This new form of banking, that is use of ICT, is called digital banking. This is a step towards cashless economy too, because the money transaction happens not via physical currency but digitally. This has also reduced the burden on physical banking infrastructure.
Efforts by Government of India
The GoI has been making concerted efforts to expand its digital infrastructure and enable access to financial services through the Unique Identity-Aadhaar and the Digital India programme (to deliver public services through digital channels and to connect rural areas with high-speed internet). Another far-reaching move towards digitisation is the shift towards government-to-person (G2P) payments or direct benefit transfers (DBTs) (GPFI 2017).
Amid the gloom of the Covid-19 pandemic, the past year has shown some pleasant surprises in the efforts to promote India’s digital journey.
The Pradhan Mantri Jan Dhan Yojana has added 42.4 crore bank accounts in the past seven years, of which 28 crore are owned by rural Indians. Over 23.5 crore women now own bank accounts across rural and urban India. While Jan Dhan was the first pillar of the ambitious JAM trinity, Aadhaar card seeding and bank account linkages to mobile numbers have empowered people in hitherto unimagined ways. The JAM trinity has helped people know their account status, receive scholarships and fellowships, get fertiliser and LPG subsidy, disability pensions and farm income support — directly into their accounts.
In the past one year alone, Rs 4.3 lakh crore was transferred, in over 477 crore transactions under 319 schemes, and an estimated saving of Rs 1.8 lakh crore under DBT was observed.
Key Recommendations of ‘Connected Commerce: Creating a Roadmap for a Digitally Inclusive Bharat’ – A report by NITI Aayog and Mastercard
Conclusion
Digital Financial Inclusion is critical to achieving the Sustainable Development Goals to which India remains committed, especially when it comes to fighting poverty, reducing gender inequalities and ushering in greater social equity, among others. India being a major economy must reap benefits of digital age for which digital literacy is inevitable.
The digital journey, however, is long and one hopes to see the positive trends sustaining given their transformative impact on the lives of Indians.
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