Topics Covered: Inclusive growth and issues arising from it.
NITI Aayog report on digital financial inclusion:
Context:
NITI Aayog and Mastercard have released a report titled ‘Connected Commerce: Creating a Roadmap for a Digitally Inclusive Bharat’.
- The report identifies challenges in accelerating digital financial inclusion in India and provides recommendations for making digital services accessible to its 1.3 billion citizens.
Challenges in accelerating digital financial inclusion:
- Digital Exclusions.
- Unfamiliarity With DBT.
- Breeding of Corruption.
- Inadequate Rural Banking.
- Unsuccessful Banking Correspondent Model.
- Accountability Issue.
Key recommendations in the report include:
- Strengthening the payment infrastructure to promote a level playing field for NBFCs and banks.
- Digitizing registration and compliance processes and diversifying credit sources to enable growth opportunities for MSMEs.
- Building information sharing systems,including a ‘fraud repository’, and ensuring that online digital commerce platforms carry warnings to alert consumers to the risk of frauds.
- Enabling agricultural NBFCs to access low-cost capital and deploy a ‘phygital’ (physical + digital) model for achieving better long-term digital outcomes. Digitizing land records will also provide a major boost to the sector.
- To make city transit seamlessly accessible to all with minimal crowding and queues, leveraging existing smartphones and contactless cards, and aim for an inclusive, interoperable, and fully open system such as that of the London ‘Tube’.
Sources: PIB.
