'In just 6 years': World Bank praises India’s digital public infrastructure push

The World Bank has lauded India's Digital Public Infrastructure (DPI) for its transformative impact, extending beyond mere financial inclusion. The international financial institution commended India's remarkable achievements in just six years, accomplishments that would typically have taken nearly five decades to realize.

It is no secret that India has successfully developed a robust digital public goods infrastructure, which holds the potential to positively influence lives worldwide. Key examples of these initiatives include UPI (Unified Payments Interface), Jan Dhan, Aadhar, ONDC, and CoWin.

The World Bank's G20 Global Partnership for Financial Inclusion (GPFI) document, prepared in anticipation of the G20 Summit in New Delhi, highlights the significant steps taken by the Indian government and the pivotal role of government policies and regulations in shaping the DPI landscape.

'The JAM Trinity'

The World Bank underscores the significance of the "JAM Trinity" (Jan Dhan, Aadhar, Mobile), which combines universal bank account access, Aadhaar identification, and mobile connectivity. This triumvirate has propelled India's financial inclusion rate from 25 percent in 2008 to over 80 percent of adults within the past six years. The World Bank estimates that this journey was shortened by up to 47 years thanks to the DPIs.

The World Bank not only acknowledged the role of DPIs in this leap forward but also emphasised the importance of other ecosystem variables and policies that have built upon the availability of DPIs.

"While DPIs’ role in this leapfrogging is undoubtable, other ecosystem variables and policies that build on the availability of DPIs were critical. These included interventions to create a more enabling legal and regulatory framework, national policies to expand account ownership, and leveraging Aadhaar for identity verification,” the World Bank document said.

Since its launch in 2014 during Prime Minister Narendra Modi's tenure, the Pradhan Mantri Jan Dhan Yojana (PMJDY) has seen remarkable growth. The number of PMJDY accounts tripled from 147.2 million in March 2015 to 462 million by June 2022, with women owning a significant 56 percent of these accounts, totaling more than 260 million.

PMJDY, a national initiative for financial inclusion and banking the unbanked, marked its ninth year of implementation. It was initially announced by Prime Minister Narendra Modi during his maiden Independence Day address in 2014 and officially launched on August 28, 2014. PMJDY has successfully brought the unbanked population into the formal banking system, expanded India's financial architecture, and achieved near-universal financial inclusion among adults.

UPI-led transformation

The World Bank also acknowledged India's adept use of technology for direct benefit transfers to citizens and the utilization of UPI for retail payments. The DPI in India has not only improved efficiency for private organizations but has also reduced complexity, costs, and time associated with business operations in the country, it said.

Unified Payments Interface (UPI), the country's smartphone-based fast payment system, has gained widespread popularity for retail digital payments. Its adoption is rapidly increasing, making it a cornerstone of India's digital financial landscape.

More importantly, the Indian government has been keen to extend the benefits of UPI beyond its borders. Several countries, including Sri Lanka, France, UAE, and Singapore, have partnered with India to explore emerging fintech and payment solutions.

PM Modi on World Bank's report

Responding to the World Bank's report on social media platform X, Prime Minister Narendra Modi responded to the report by saying that it is a testament to the "rapid progress and innovation" in India.

"India's leap in financial inclusion, powered by Digital Public Infrastructure! A G20 document prepared by the World Bank shared a very interest point on India's growth. India has achieved financial inclusion targets in just 6 years which would otherwise have taken at least 47 long years. Compliments to our robust digital payment infrastructure and the spirit of our people," he said.