India is seeing a digital revolution – and it’s mind-blowing | World | News

In April 2017, there were 7.2 million digital transactions – by 2024 it was 13 billion

In April 2017, there were 7.2 million digital transactions – by 2024 it was 13 billion (Image: GETTY)

Malti Devi runs an unusually well-stocked store that also doubles up as a stopover for tea and snacks in this corner of India. 

We are driving from Jamshedpur (in the eastern state of Jharkhand) towards Kolkatta (once the capital of India when the British Empire was its zenith) on a paved concrete highway.

Malti says she is 48 years old and still surprised by the quality of the highway that came up in 2019. But that’s another story. 

As I get up to pay for a plate of “Paratha” with yoghurt and ginger-laced tea, Malti says she would prefer Google Pay instead of cash. 

Curious, I ask her why. “First, the money goes straight to my own bank account. Second, the cash at home might tempt my husband to invite his friends for a drinks party”, she responds promptly. 

One of the many miracles triggered by the digital revolution in India is the phenomenal empowerment of women in a society that is still conservative and patriarchal.

You will find a Malti Devi in every nook and corner of India, with a scanner ready to accept digital payments. 

The tinkle followed by the twang of a voice announcing the successful payment of Rs 20 or Rs 20,000 is ubiquitous. And why not? 

A customer uses the BharatPe digital payment system in Mumbai, India

A customer uses the BharatPe digital payment system in Mumbai, India (Image: GETTY)

The Unified Payments Interface was launched in 2016 to facilitate digital transactions via mobile phones amidst much scepticism. 

A former finance minister and senior leader of the Congress party had even mocked the initiative, wondering how illiterate and ignorant women and men selling vegetables would grasp the complexities of the process. 

The same “illiterate and ignorant” Indians have taken to digital transactions more effortlessly than a duck takes to water. 

In April 2017, there were 7.2 million digital transactions. By April 2020, the number crossed one billion and was 13 billion in April 2024. 

The cumulative value of these small transactions in April 2024 was about $25billion. One group of victims of this explosion in digital payments is companies making toffees and small chocolates that have seen a 40% drop in sales since 2018. 

The reason: when people paid cash earlier to buy stuff from a shopkeeper, he would plead lack of exact change and give toffee instead! As the car glides along on the highway, I am struck by a sudden thought. 

For all the hype and hoopla over “India Rising”, it is still largely a third-world country with about 150 million citizens living in poverty. 

But one aspect where it can legitimately claim first-world status is the digital infrastructure that has been developed by the Narendra Modi regime in the last decade or so. 

The cumulative value of small digital transactions in April 2024 was about $25billion

The cumulative value of small digital transactions in April 2024 was about $25billion (Image: GETTY)

Ironically, the idea to create a nationwide digital payments and transactions infrastructure was first mooted when Dr Manmohan Singh was the prime minister of a Congress-led UPA regime. 

But engulfed by scams, an economic crisis and policy paralysis, the regime didn’t have the energy or political capital to push ahead. 

Even more ironic is the man newly elected prime minister Narendra Modi picked up to lead the project to digitise India.

More than two decades ago, American author & columnist Thomas Friedman had written a best-selling book called The World Is Flat. One person featured prominently in the book was Nandan Nilekani, the billionaire co-founder of the software & IT services company Infosys. 

Nilekani contested the 2014 Lok Sabha against the the BJP as a Congress candidate from his home base Bangalore. He lost. 

Narendra Modi invited him for a meeting and Nilekani was given a free hand to launch a blitzkrieg of digitisation. 

First, commercial banks were incentivised by open “zero balance” savings accounts (called “Jan Dhan”) so that poor Indians could access the formal banking system. More than 530 million such accounts are operational now and most have money saved in them. 

The second was to aggressively push for every citizen to get a biometric identity document called the Aadhar card. As of April 2024, about 1.38 billion Indians now have an Aadhar card. 

The final element that completed the now globally renowned JAM trinity that has completely transformed India is the mobile phone. In many ways, Narendra Modi is a lucky man. 

Just as his regime was pushing the Jan Dhan-Aadhar-Mobile trinity, the 4G technology swept across India after 2016. Today, it is 5G, of course. 

Two things happened. Smartphone handset prices dropped to as affordable as $125. No wonder, more than 170 million smartphones are sold every year in India. 

Second, the cost of data usage on a mobile phone dropped dramatically. It is about 15 cents in India, compared to 80 cents in England. This has enabled more than 750 million Indians to become active internet users. 

Does all this matter as India votes to elect a new government? A lot, actually. 

The Modi regime spent upwards of $250billion last year on various welfare schemes that make life easier for the poor. 

Almost all the money was transferred directly to the Aadhar card-verified bank accounts of beneficiaries through a mobile phone interface. Middle-aged Indians still remember how the late Rajiv Gandhi, father of Rahul Gandhi who wants to dislodge Narendra Modi as prime minister, had publicly bemoaned as prime minister that barely Rs 15 of every Rs 100 sent as welfare actually reached the intended beneficiaries. 

Modi is banking on this transformation to win a record third consecutive mandate. 

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