Team Blitz India
NEW DELHI: Ahead of the G20 Summit in New Delhi, the World Bank released a policy document commending India’s exceptional progress in achieving a financial inclusion rate of 80 per cent within just six years. This achievement is largely attributed to the transformative initiatives undertaken by the Indian Government.
The G20 policy document, titled ‘G20 policy recommendations for advancing financial inclusion and productivity gains through digital public infrastructure,’ prominently highlights the Government’s key initiatives, such as Jan Dhan Yojana, Aadhar, and mobile phones, collectively known as the JAM trinity.
Key achievements
According to the report, without these initiatives, India might have taken a staggering 47 years to reach this level of financial inclusion. The report lauds the use of Digital Public Infrastructure (DPI) in India, which led to a substantial reduction in banks’ costs for customer onboarding, decreasing from $23 to just $0.1. As of March 2022, India saved a total of $33 billion, equivalent to almost 1.14 per cent of the GDP, with the implementation of the Direct Benefit Transfer (DBT) scheme.
The report notes, “In just six years, it (the India stack) has achieved a remarkable 80 per cent financial inclusion rate — a feat that would have taken nearly five decades without a DPI approach. Implementation of DPIs such as Aadhaar, along with the Jan Dhan bank accounts and mobile phones, is considered to have played a critical role in moving ownership of transaction accounts from approximately onefourth of adults in 2008 to over 80 per cent now.”
Swift transformation
The World Bank report commends the Indian public, especially city dwellers, who quickly adapted to these changes. The widespread acceptance of the Unified Payments Interface (UPI) is one such example.
“UPI has been widely adopted, benefitting from a user-friendly interface, open banking features, and private sector participation. The UPI platform has gained significant popularity in India; more than 9.41 billion transactions, valued at about Rs 14.89 trillion, were conducted in May 2023 alone. For 2022-23, the total value of UPI transactions was nearly 50 per cent of India’s nominal GDP,” notes the World Bank report.
