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:
| Achievement | Details |
| Financial Inclusion Rate | Increased from 25% in 2008 to over 80% of adults in 6 years thanks to DPIs. |
| PMJDY Accounts | The number of PMJDY accounts tripled from 147 million (Mar 2015) to 462 million (Jun 2022), with 56% owned by women. |
| Jan Dhan Plus Program | Encouraged 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 Payments | Supported transfers of $361 billion directly to beneficiaries through 312 schemes, resulting in $33 billion in savings (Mar 2022). |
| UPI Transactions | More 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 Organizations | Enhanced efficiency for private organizations, enabling higher conversion rates, cost savings, and reduced fraud detection costs. |
| Lower Cost of Compliance for Banks for KYC | Reduced KYC compliance costs from $0.12 to $0.06, making lower-income clients more attractive for services and generating profits. |
| Cross-Border Payments | UPI-PayNow interlinking between India and Singapore facilitates faster, cheaper, and more transparent cross-border payments. |
| Account Aggregator (AA) Framework | AA 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. |
