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DPI achieves an 80% financial inclusion rate in India

GS Paper 3

 Syllabus: Financial Inclusion

  

Source: PIB

 Context: India’s use of Digital Public Infrastructure (DPI) has achieved an 80% financial inclusion rate in just six years, according to a World Bank report.

  • A feat that would have taken nearly five decades without a DPI approach

 

The article should be read in continuation of the y’day article on Financial Inclusion.

 

What is DPI?

 

Achievements of Digital Public Infrastructure (DPI) in India:

AchievementDetails
Financial Inclusion RateIncreased from 25% in 2008 to over 80% of adults in 6 years thanks to DPIs.
PMJDY AccountsThe number of PMJDY accounts tripled from 147 million (Mar 2015) to 462 million (Jun 2022), with 56% owned by women.
Jan Dhan Plus ProgramEncouraged low-income women to save, resulting in over 12 million women customers (Apr 2023) and a 50% increase in average balances in 5 months.
G2P PaymentsSupported transfers of $361 billion directly to beneficiaries through 312 schemes, resulting in $33 billion in savings (Mar 2022).
UPI TransactionsMore than 9 billion transactions were valued at about Rs 15 trillion in May 2023, accounting for nearly 50% of India’s nominal GDP in FY 2022-23.
Efficiency for Private OrganizationsEnhanced efficiency for private organizations, enabling higher conversion rates, cost savings, and reduced fraud detection costs.
Lower Cost of Compliance for Banks for KYCReduced KYC compliance costs from $0.12 to $0.06, making lower-income clients more attractive for services and generating profits.
Cross-Border PaymentsUPI-PayNow interlinking between India and Singapore facilitates faster, cheaper, and more transparent cross-border payments.
Account Aggregator (AA) FrameworkAA Framework aims to strengthen India’s data infrastructure, enabling consumers and enterprises to share their data only with their consent through an electronic consent framework. The framework is regulated by RBI.
Enabled over 1 billion cumulative accounts for data sharing with over 13 million cumulative consents raised in June 2023.
Data Empowerment and Protection Architecture (DEPA)Grants individuals control over their data, enabling tailored product and service access, and fostering innovation and competition.