India is now looking at a cardless future

Taking into account the speed of digitisation and internet connectivity that have taken the world by storm, India has reached a point where it can trigger off the Fourth Industrial Revolution. Digitisation has the power to empower societies, add zip to innovative business models and support governments to focus on and resolve genuine policy issues. Digital governance intends to sculpt a digital economy and create a collective, credible habitat that is inclusive, commercially minded and socially progressive.

Smartphone and internet usage has grown in India and this puts the country with a population of 1.3 billion at an advantage. A digital lifestyle is becoming passe. Morgan Stanley, in a research report says is India outrunning the US as the second-biggest smartphone. With social media, the customer base is growing and people are smarter. Digital technology has become a family member of sorts, playing a significant role in lives, right from groceries to offices. It helps people deal with issues and concerns. And in some cases, it also enables real time resolution of problems.

The country has this century’s lion’s stake in digital technologies, thanks to its youth who are making optimum use of them to connect as well as to transact. For many people, digital communication is the only way to touch base. The troika of Jan Dhan (accounts for rural and poor people), Aadhaar (identity), and the government’s mobile payment interface (the three transformers) are taking digital to the grassroots. The mobile phone in India is not merely a calling device, it is a pocket bank which has myriad roles.

The Modi government’s first digital launch was the Pradhan Mantri Jan Dhan Yojana, a financial inclusion scheme on August 28 2014. The day it came into effect, the government created 10 million bank accounts using existing Aadhaar IDs in a paperless way, at a fraction of the cost.

The government has generated more than 300 million new, essential bank accounts. Along with a free, zero-balance account, Jan Dhan account holders also get an accident insurance cover of Rs100,000, with an overdraft feature of Rs5,000. In one stroke the government brought those unbanked within the ambit of the formal banking system.

In November 8, 2016, the government took out 86 per cent of the country’s currency notes from circulation. The following months, more than 1 billion people came together to ‘cold boot’ the nation’s monetary system. The government’s payment mechanism cleared 100,000 transactions per month across the desk in October 2016, before demonetisation.

As demonetisation celebrated its first birthday in November last year, the same system churned out 76 million transactions every month. India’s Finance Ministry said that the national economy is functioning with $45 billion less cash than what it had before demonetisation. Then came the big tax reform. A mesh of 17 different taxes were swept aside with a single Goods and Services Tax (GST) last year and the benefits are being felt already.

India is adding 110 million smartphones every year and the government is on the verge of introducing Aadhaar-flexible gadgets with biometric verification built into mobile phones. The power of the ‘three transformers’, is being felt, it is palpable, it is spreading across the country. While the world is going cashless, India is already looking at ‘cardless’ growth. The future is here.

The author is Expert Lead - CSR (Commercial Projects) with the Government of India, and is the former Director of MyGov.in, the principal citizen engagement platform in India