COVID-19 has accelerated India’s digital reset
Since the beginning of its COVID-19 lockdown in late March, India has distributed around $5 billion in cash benefits to its citizens who need assistance the most, entirely through payments made via digital platforms.
The country was already on a digital-first trajectory with one of the highest volumes of digital transactions in the world when the pandemic struck, and further propelled the use of contactless digital technology.
Data from the apex Reserve Bank of India (RBI) show that India is now clocking around 100 million digital transactions a day with a volume of 5 trillion rupees ($67 billion), about a five-times jump from 2016. RBI expects this to further grow five-fold to 1.5 billion transactions a day worth 15 trillion rupees ($200 billion). Much of this is powered by the United Payment Interface (UPI), a real-time payment system developed by the National Payments Corporation of India and monitored by RBI.
This digital-first reset of a country of 1.3 billion people is not only technological advancement but, more importantly, it is the foundation of a new mechanism for the deliverance of goods of governance. Embedded in this programmatic use of technology by the state are two promises which have historically been difficult to fulfil in India – speed and the plugging of leakages. The use of digital technology led to savings of nearly $23 billion, 98% of this by eliminating erroneous beneficiaries.