Is it fair to compare countries on the basis of data and indexes? Normally, kinds of indexes do not take into account population, level of industrialization, history, geography and similar factors. This way, comparing India and China and USA might be very unfair. Sometimes absolute numbers are compared, and they too have their own drawbacks.
For example, see what happens if we take the Covid comparisons made on population basis. A fair relative comparison would tell you that India should have had 14 crore infections and 25 lakh deaths, if matched with that of the US. Instead, we had just 3.38 crore infections and under 5 lakh deaths.
Data and comparison debate apart, now India is poised to become one of the largest digital markets in the world. Addressing the second Global Fintech Fest-2021, Union Minister of Commerce and Industry Piyush Goyal said, “At 87 Per Cent, India has the highest FinTech adoption rate in the world against the global average of 64 per cent”.
According to a Commerce Ministry release, here are the details:-
• As of May 2021, India’s United Payments Interface (UPI) has seen participation of 224 banks & recorded 2.6 billion transactions worth over $68 Bn and the highest ever, more than 3.6 Bn transactions, in Aug’21.
• Over 2 trillion transactions were processed using the AePS (Aadhar-enabled payment system) last year.
• India’s FinTech industry came to the rescue of people at the time of pandemic, by enabling them to carry out critical activities from the safety of their homes, particularly during the lockdown & the 2nd wave of Covid.
• As Prime Minister Modi says, ‘every crisis can be converted into an opportunity’, now citizens do not have to go to the banks, the banks have come to their homes and on their mobile phones.
• India underwent a digital transformation in Mission Mode since the PM announced the Jan Dhan Yojana in his first Independence Day speech on assuming office, on 15th August 2014.
• More than 2 crore accounts were opened under the scheme, which has been considered a world record.
• JAM trinity, besides DBT, has brought in transparency, integrity and timely delivery of financial benefits and services to India’s vast population.
• JAM trinity has enabled India to leverage its technical capabilities for developing Fintech sector.
• The National Broadband Mission soon every village in India will have high speed internet and this power can be leveraged to make India a Fintech Innovation Hub.
• FinTech today has the potential to bring investments for mobile apps, e-commerce stores & several other digital infrastructures.
• Investment inflow in the Fintech sector which has gone up to $10Bn since it started in 2016 has the huge potential to “Up the Game”, it will simultaneously enhance customer experience. Your strength will be augmented by the world’s 3rd largest Startup ecosystem which is hungry for growth.
• The non-financial services sectors are also proactive in adopting FinTech solutions today.
• Indian MSMEs have also rapidly adopted FinTech solutions whether for credit, payments, accounting & tax filing.
• Government has recently launched the Open Credit Enablement Network (OCEN) & Account Aggregator (AA) framework. These enable formal credit flow to the most vulnerable segments, especially particularly small businesses, brings Ease for financial institutions to reach large segments, by lowering distribution costs and now institutions can give smaller loans, with short repayment cycles.
• India is today one of the fastest growing Fintech markets with more than 2,100 FinTechs.
• A lot of Indian Fintech markets are unicorns and India’s market is currently valued at $31 Bn, and expected to grow to $84 Bn by 2025.
So, what does it mean?
• Look deep. These numbers of transactions reflect not just the number of people engaged, but also the disposable income available to spend on those transactions.
• These data show that our middle class component is 28%. In absolute terms it is huge and it is growing fast. This might be the biggest news for the coming times.
• These numbers reflect that we have infrastructure, we have trained and educated manpower. It means that the world expects India to progress; it means that India will not only become largest Digital Market but also a largest producer of electronic digital products
• Let’s return to comparisons again. In 2014 the number of digital transactions in China was almost four times that in India. From then till now, China grew by six times. But with a scorching pace India jumped to number one position, and the immediate second China is with half of Indian transactions. This shows where the economic prophesies of 1990s and 2000s have gone wrong.
• As transactions grow more transparent and clean, it is bound to buoy up tax collections as well as encourage better and above the board business practices. As money from transactions get realised faster it also speeds up economic activity as cash is not frozen in clearance within the system.
And this India story survived twin waves of pandemic and recession.
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