There is no doubt that India wants to grow at rapid pace to meet the increasing demands of its population. In this process, it is also looking at involving technology to improve the quality of life of the citizens. The recent demonetisation and thrust on digital transactions is suggestive of that. However, the question is that 70 per cent of the nation still resides in rural areas where infrastructure condition is dismal.
Presently, India is banking on the slew of measures taken since February 2016 to boost digital transactions. A month after the historic demonetisation move by the government, the Union Finance Minister, Arun Jaitley announced a raft of freebies and discounts for the citizens if they use digital transactions. However, citizens on the social media platforms criticised the government suggesting the minister is resembles that of a salesman from a e-commerce venture. The criticism was also about shifting of goal posts from black money to being a cashless economy. All this, because of the suffering that the common man is going through because of lack of infrastructure, planning and implementation capabilities.
Fiinovation fails to understand that how can a government want the nation to become cashless when even the top executives of banks and businesses use wads of cash to pay their daily expenses. Given India’s complains on network connectivity, how will it be possible for digitisation to reach the remotest corners of the country in such a short span of time. For a nation such as India where there is widespread illiteracy, poor internet penetration, absence of banking services, tax evasion by traders and others, etc., the dream seems to be big for now. However, Fiinovation believes that if India wants that another cycle of unaccounted wealth is not created, it will have to promote greater digital money, digital tracking, online transactions, etc.
Therefore, the measures which can be adopted on a immediate basis should focus on establishment of the necessary infrastructure at the remotest places, especially when just 18% of all the ATMs are in rural areas. Opening of bank accounts, issuing of debit cards, POS machines, promotion of e-wallets, internet connectivity and digital literacy must be the focus in the next three months if India doesn’t want to hamper growth in the next fiscal.
It is expected that India will benefit from the tax evaders who will be caught in the online transactions. With more money in the banks, they will be able to loan them to individuals and also for social projects which will ensure their is higher growth for the country. Digitisation will also bring the rural areas closer to the global export markets and spur growth and development in backward regions.
Let’s hope that India’s bet is worth the short term pain.
By Rahul Choudhury
Media & Communications, Fiinovation