The World Bank has praised India's transformative impact of Digital Public Infrastructures (DPIs) in the past decade under the Narendra Modi-led government. As part of the G20 Global Partnership for Financial Inclusion the World Bank prepared a document and highlighted the steps taken by the Centre and the pivotal role of government policy and regulation in shaping the DPI landscape.
Prime Minister Narendra Modi on Friday tweeted about the World Bank’s G20 document where the global agency lauded India’s leap in financial inclusion.
The report stated about India’s standout achievements and rapid progress in financial inclusion. The Jan Dhan Yojana (JAM) Trinity, comprising the Pradhan Mantri Jan Dhan Yojana (PMJDY), Aadhaar, and mobile numbers, has played a pivotal role in increasing financial inclusion rates. In six years, India has catapulted its financial inclusion rate from 25 per cent in 2008 to over 80 per cent of adults, the report mentioned. World Bank paper has also lauded the lower cost of compliance for banks for KYC.
This monumental leap shortened the journey towards financial inclusion by up to 47 years, a feat primarily attributed to the influence of DPIs, according to World Bank.
“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 document states.
India's DPI has not only transformed the public sector but has also enhanced efficiency for private organisations. Some Non-Banking Financial Companies (NBFCs) reported an 8 per cent higher conversion rate in SME lending, a 65 per cent reduction in depreciation costs, and a 66 per cent decrease in costs related to fraud detection.
The document mentioned the phenomenal success of India's Unified Payments Interface (UPI) with over 9.41 billion transactions valued at about Rs 14.89 trillion taking place in May 2023 alone. For the fiscal year 2022–23, the total value of UPI transactions nearly reached 50 per cent of India's nominal GDP. The UPI-PayNow interlinking between India and Singapore, operationalised in February 2023, has facilitated faster, cheaper, and more transparent cross-border payments in line with the G20's financial inclusion priorities.