NITI Aayog's Blueprint for Digital Inclusion Bharat

NITI Aayog’s Blueprint: NITI Aayog and Mastercard teamed up to bring us a report called ‘Connected Commerce: Creating a Roadmap for a Digitally Inclusive Bharat.’ This report digs into the hurdles hindering the speedy adoption of digital finance in India. It doesn’t just stop at highlighting the issues; it also suggests ways to make digital services available to all of India’s 1.3 billion people.

Key Findings of the Roadmap for a Digitally Inclusive Bharat

Empowering Small Businesses Worldwide: Small businesses play a huge role in India’s growth, employing over 40% of the non-farm workforce. Unfortunately, they face challenges like lack of documentation and high informal credit rates. To help them thrive, we suggest simplifying registration and compliance through digital processes and diversifying credit sources.

Ensuring Safe Online Shopping: While digital payments have soared, so have the risks of cyber-attacks. Around 40,000 attacks targeted India’s banking IT infrastructure in 2020. To make online shopping safer, let’s create information-sharing systems, including a ‘fraud repository.’ Additionally, ensure that online platforms warn consumers about potential fraud risks.

Revolutionizing Agriculture with Tech: Agriculture is a crucial part of India’s economy, but it hasn’t fully embraced digital transactions or made formal credit more accessible for farmers. To change this, let’s empower agricultural finance companies to access affordable capital. Adopting a ‘phygital‘ approach (blending physical and digital) can lead to lasting digital improvements. Also, digitizing land records will significantly benefit the sector.

Digital Financial Inclusion for All: Despite significant strides in digital financial initiatives, the challenge lies in the ‘last mile’ where account holders often withdraw cash. To address this, let’s strengthen payment infrastructure to create a fair playing field for both non-banking financial companies (NBFCs) and traditional banks.

Smart Transit for Smart Cities: With the transport sector expected to contribute 12% to GDP by 2026, there’s a massive opportunity for collaboration between the government and private sector. To make transit accessible to everyone, including visitors and migrant workers, offer digital payment benefits to those in need. Use existing technology like smartphones and cards to make transit systems more efficient.

Digital Financial Inclusion Initiatives Taken in India

JAM Trinity for Easy Access to Services:

Aadhaar, Jan-Dhan Yojana, and mobile phones have changed how we access government services.
Over 380 million people have benefited from the Jan Dhan scheme as of March 2020.

Bringing Finance to Rural Areas:

The RBI and NABARD are working to include more people in rural areas in the financial system.
This includes opening banks in remote areas, providing Kisan Credit Cards, connecting self-help groups with banks, increasing ATMs, and using business correspondents.

Secure Digital Payments:

Digital payments are now more secure thanks to improvements in the Unified Payment Interface (UPI) by NPCI.
Aadhar-enabled Payment System (AEPS) allows Aadhar-linked bank accounts to be used anywhere, anytime through micro ATMs.
Offline platforms like USSD make mobile banking accessible even without the internet.

Boosting Financial Literacy:

The RBI’s “Project Financial Literacy” aims to spread knowledge about banking to different groups.
The Pocket Money program by SEBI and NISM focuses on increasing financial literacy among school students.