'Five-decade journey in 6 years': World Bank praises India's digital public infra and its impact

The World Bank on Friday praised India's Digital Public Infrastructure (DPI) for its transformative impact in the past 10 years under the present Indian government. The financial institution said India achieved remarkable landmarks in just six years, accomplishments that would typically have taken nearly five decades to realise.

In its G20 Global Partnership for Financial Inclusion (GPFI) document, the World Bank noted how India has developed a robust digital public goods infrastructure, with initiatives such as UPI (Unified Payments Interface), Jan Dhan, Aadhar, ONDC, and CoWin.

The GPFI document, prepared in anticipation of the G20 Summit hosted by India, noted the significant steps taken by the Narendra Modi-led government and the pivotal role of government policies and regulations in shaping the DPI landscape.

The World Bank underscores the significance of the "JAM Trinity" (Jan Dhan, Aadhar, Mobile), which combines universal bank account access, Aadhaar identification, and mobile connectivity.

The document noted: “While DPIs’ role in this leapfrogging is undoubtable, other ecosystem variables and policies that build on the availability of DPIs were critical. These included interventions to create a more enabling legal and regulatory framework, national policies to expand account ownership, and leveraging Aadhaar for identity verification.”

Here are the top points in the document:

1/ The Jan Dhan Yojana (JAM) Trinity, comprising the Pradhan Mantri Jan Dhan Yojana (PMJDY), Aadhaar, and mobile numbers, has played a pivotal role in increasing financial inclusion rates.

2/ In just six years, India has catapulted its financial inclusion rate from 25% in 2008 to over 80% of adults, according to the report.

3/ India's DPI has not only transformed the public sector but has also enhanced efficiency for private organizations.

4/ Some Non-Banking Financial Companies (NBFCs) reported an 8 per cent higher conversion rate in SME lending, a 65 per ent reduction in depreciation costs, and a 66% decrease in costs related to fraud detection.

5/ The report highlighted the phenomenal success of Unified Payments Interface (UPI) with over 9.41 billion transactions valued at about Rs 14.89 lakh crore taking place in May 2023 alone. For the fiscal year 2022–23, the total value of UPI transactions nearly reached 50 per cent of India's nominal GDP.

6/ The UPI-PayNow interlinking between India and Singapore, operationalized in February 2023, has facilitated faster, cheaper, and more transparent cross-border payments in line with the G20's financial inclusion priorities.

Since its launch in 2014, the Pradhan Mantri Jan Dhan Yojana (PMJDY) has seen multifold growth. The number of PMJDY accounts tripled from 147.2 million in March 2015 to 462 million by June 2022, with women owning a significant 56 per cent of these accounts, totaling more than 260 million, as per government data.

UPI, the country's smartphone-based fast payment system, has gained widespread popularity for retail digital payments. India has UPI links with several countries, such as Sri Lanka, France, UAE, and Singapore.

PM Modi on World Bank's report
Responding to the World Bank's report on social media platform X, Prime Minister Narendra Modi responded to the report by saying that it is a testament to the "rapid progress and innovation" in India.

"India's leap in financial inclusion, powered by Digital Public Infrastructure! A G20 document prepared by the World Bank shared a very interest point on India's growth. India has achieved financial inclusion targets in just 6 years which would otherwise have taken at least 47 long years. Compliments to our robust digital payment infrastructure and the spirit of our people," he said.

Talking about the DPI, Rajeev Chandrasekhar, Minister of State, Ministry of Electronics & IT told Business Today: “It’s Prime Minister’s vision that there will be no part of the government that will be left without being digitalised. So, effectively, you will see DPI is now spanning the entire spectrum of current government public services and anything that we are planning in the future. So, it may be shocking for you to hear or surprising depending on which way you are inclined. But I think there will be at least about 20 to 30 new applications that will pile up on the India DPI that will be addressing different slivers of the Public Service stack that is the India Stack or India DPI.”

Also read: G20 Summit: PM Narendra Modi to hold more than 15 bilateral meetings, will start with US, Mauritius, Bangladesh

Also read: Over 20 services to be added to Digital Public Infrastructure, says Minister Rajeev Chandrasekhar