Digital payments driving India's shift to unified mega-economy, says Nilekani

India’s digital public infrastructure, such as Aadhaar, the Universal Payments Interface (UPI), and digilocker, would change India from an informal, low-productivity, numerous collection of micro-economies to a formal, high-productivity mega-economy, said Chairman and Co-Founder of Infosys Nandan Nilekani on Sunday.

"What is fundamentally happening is that India is going from multiple sets of micro-economies to a single mega-economy. This is the trend for the next 20 years. This has been solved by a new way of solving problems called digital public infrastructure, which solves problems with technology at the population scale," Nilekani said at the B20 Summit in Delhi.

Furthermore, while the rest of the world struggles to reconcile innovation and regulation, the senior technology executive claims that India has already found a balance through a participatory form of data governance and architecture.

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"When you use a digital platform, it generates data. India has developed a novel method for people and businesses to monetize their data footprint. This data footprint is their digital capital. Individuals may use digital capital to advance in life. This notion does not exist anyplace in the world," he added.

Nilekani presented various data points relating to DPIs to demonstrate the country's widespread approval. For example, he stated that due to DPIs, India was able to send $4.5 billion to the bank accounts of 150 million residents during COVID, and 700 million people already have bank accounts linked to their Aadhaar numbers.

UPI has grown to become the world's most important payment system, with over 9.66 billion transactions conducted on the network each month, and 1.3 billion individuals now utilize Aadhaar to do 80 million identity authentication transactions every day.

"India accomplished in 9 years what would have taken 47 years using traditional methods. "We went from being one of the least banked countries to one of the most financially inclusive," Nilekani said.

"Without the $250 billion IT services industry, none of this would have been possible. In addition, we have an exceptional startup ecosystem. We had 1,000 startups in 2016. We now have one lakh. "It is not a 10 percentlinear growth, but a 10x growth," he continued.

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