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Reaping India’s digital dividend by


               By Ajay Banga, CEO, Mastercard

               A lot of the excitement around Digital           wider to include the greatest possible
               India rises from the promise it holds            numbers of the underserved and
               for greater empowerment. It opens up             unbanked members of society.
               the world of financial inclusion to              This is not going to be easy. The
               millions of Indians who earlier stayed           challenge lies in keeping the
               below the banking radar.
                                                                momentum going. India needs to find
               In his Independence Day speech on                ways to get the next 200 million
               August 15, 2017, Prime Minister                  Indians to open bank accounts; to
               Narendra Modi called it the rise of a            transfer wages of millions of farm and
               new India. India now has 1.16 billion            construction workers through safe and
               people with biometric identity cards             secure digital channels; to help millions
               that are being linked to individual bank         of merchants, traders and micro
               accounts. In the last couple of years            entrepreneurs – who form the
               around 290 million new bank accounts             backbone of India’s economy – gain
               have been opened, most of them zero-             financially and become more
               balance accounts meant for the                   productive by adopting digital models.
               underprivileged. These bank accounts             The digital landscape is huge and
               are making it easier for the                     having taken a few big steps, India
               government to directly transfer                  needs to keep moving towards the end
               subsidies and other benefits to the              goal. Globally, more countries are
               needy. Over a 100 million rural                  shifting towards cashless payment
               employment cards (under the MNREGA               models. Netherlands, Canada and
               scheme) used by farm laborers have               Australia are almost entirely cashless
               been digitized, thus allowing payments           economies. India, on the other hand, is
               to be made electronically, and without           amongst the most cash-intensive
               systemic leakages. Technology is                 economies in the world, with a cash-to-
               smoothening the path of social                   GDP ratio of 12%, almost four times
                                                                that of markets such as Brazil, Mexico
               Miles to go                                      and South Africa.

               And yet the potential for further                It is estimated that the Reserve Bank of
               inclusion is immense and India can               India and commercial banks spend as
               reap greater social dividends from its           much as INR 22,000 crore on managing
               digital mission. The need of the hour is         cash. Even a 5 percent growth in
               to spread the financial blanket even             cashless transactions will save the
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