Fintech
Economic Survey 2023-24: Fintech the cornerstone to help India achieve financial inclusion: Economic Survey 2023-24
THE government wants to promote a data-driven lending mechanism in the medium term to meet the financial needs of small businesses and stimulate growth, said the Economic survey for 2023-24, tabled in Parliament on Monday by Finance Minister Nirmala Sitharaman. It says the government wants to create a centralised KYC (know your customer) mechanism among industry regulators to standardise this crucial aspect of financial services that helps in proper identification of customers.
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Highlighting the role played by open platforms promoted by the government and financial technology Among the major players in the country’s progress, the Economic Survey has stated that India is the third largest fintech market in the world.
“The next big move in the coming years is likely to be towards artificial intelligence/machine learning (AI/ML), decentralized finance, Internet of Things (IoT), etc., which have vast potential to disrupt the digital payments ecosystem,” the Economic Survey said.
The document, presented a day before the Union Budget, highlighted financial services and their access to the masses as the cornerstone of the government’s goal of making India a developed nation by 2047. The government wants to reduce the cost of financial intermediation which will ultimately help drive financial inclusionhe said.
Referring to technological innovations in the country, the Economic Survey said that through wide coverage of DBT (direct benefit transfer) payments, promoting digital payments through Unified Payments Interface (UPI) and feature phone-based payment systems like UPI123 and UPI Lite for low-value transactions, the government aims to achieve financial inclusion.
The Economic Survey added that government initiatives and the scale of technology implementation have helped drive down the prices of providing services: for example, the price of eKYC has come down from around $12 (about Rs 1,000) to six cents (about Rs 5) in the past.
The government wants India to be at the forefront of the fintech revolution in the world, and platforms such as Aadhaar, eKYC, AePS (Aadhaar Enabled Payment Systems), BharatQR and DigiLocker have helped in the timely delivery of financial services to the people, the Economic Survey said. It cited research by the International Monetary Fund, which said that adoption of digital payments helps accelerate economic growth by 2.2%.