Empowering India Through Digitalisation

If you look back at the last decade, the adoption of digital payments has been one of the more significant achievements, said Lloyd Mathias, Business Strategist, Angel Investor, while discussing the JAM trinity scheme and the experiences of consumers and merchants, along with how digital adoption has picked up in rural areas vis-à-vis urban areas.

He added that the second significant jump came with the establishment of the NPCI and UPI, which provided a layer of security. In terms of what it does for local industries, specifically MSMEs, it has opened horizons for big transactions and enabled small payment infrastructure.

Mathias proceeded to give an example of how today an MSME is no longer a big organization; it’s a housewife making pickles in some corner of India. Through the ability of this payment ecosystem and by working with some e-commerce marketplaces, she’s able to reach a large audience not just nationally but also internationally.

Harjinder Kaur Talwar, India Chair of the Start-up 20 Inclusion Task Force for G20 India, and MD & CEO of Comvision India, stated, “One screen, one phone.” This encapsulates the power that digitalisation has granted to India, placing us on the world map, according to Talwar. Your identification is available on your phone, and your payment ID is available on your phone, all without any intermediary, she explains. “That’s what the JAM trinity has achieved for India.

Speaking about digital lending, Dr Subhransu Sekhar Acharya, Chief General Manager at SIDBI, addressed the primary concerns of MSMEs: access to credit and access to markets. Formal financial institutions struggle to provide credit to small businesses. NBFCs have introduced digital processes that analyse the digital transactions of businesses to establish credit scores. The Government of India has recently launched the ONDC platform, aggressively onboarding artisans, weavers, small businesses, and entrepreneurs, where a record of digital payments proves extremely beneficial.

Ravi Nandan Sinha, Director of Development at MSME Business Forum India, discussed the future of business, stating, “Two parameters will shape the future of business: the push from the Government of India towards ‘ease of doing business,’ and the new era of the ‘speed of doing business.’ Digitalisation has accelerated the pace of business. In 2022, the value of QR code transactions was 62 billion INR; by 2026, it’s projected to exceed 125 billion INR. Sinha further emphasised, “Clients won't wait for RTGS or NEFT payments, not even for cheques. Transactions occur even on holidays—that’s the ‘speed of doing business.’ The agriculture sector contributes 17 per cent to India’s GDP; it also needs faster transactions.”

Regarding the challenges of digitisation, Harish Yadav, Assistant Director at the Ministry of Finance, acknowledged the increased speed of business due to digitisation while highlighting concerns about online fraud. These issues are being addressed through awareness programs, MSME development platforms, and government-sponsored e-learning platforms.