Digital India (DI) is a government initiative in India that aims to improve online infrastructure and internet connectivity to empower digital citizens with government services. It focuses on advancing technology, connecting rural areas with high-speed internet, and promoting digital literacy. Digital India is intricately connected to key government initiatives like BharatNet, Make in India, Startup India, and Standup India. There are many facets of Digital India and the impact it has had on the nation is already substantial.
Key Facets of Digital India
The development of robust digital infrastructure is crucial for the success of Digital India. The initiative emphasizes the expansion of mobile networks, high-speed internet connectivity, and data centers. This infrastructure development has not only facilitated digital services but has also attracted investments from global technology companies, contributing to the growth of the digital economy. The government aims to provide broadband connectivity in rural and remote areas to ascertain access to the internet infrastructure. Bharat Broadband Network Limited (BBNL), an entity under the Government of India, is responsible for implementing the BharatNet project, which also serves as the guardian of the Digital India initiative.
Digital connectivity is the backbone of an economy to spur growth of internet led businesses. With a population of 1.3 billion, India has witnessed extensive utilization of Aadhaar digital biometric identity cards and smartphones, resulting in substantial growth and monetization of digital connectivity through B2B and B2C e-commerce transactions. Mainly fueled by higher adoption in smaller urban areas, the Gross Merchandise Value (GMV) of B2C e-commerce currently stands at $65 billion, and it is projected to grow sixfold to reach $380 billion by 2030. India’s eB2B market is poised to summit to a remarkable GMV of $90-120 billion by 2030 and establish itself as a definitive pathway for brand marketing and advertising expenditure investment and become a treasure trove of valuable retailer insights and data intelligence.
The ‘India e-Conomy Report’ reveals that digital services have become essential for over 700 million internet users in India. This includes 350 million using digital payments and 220 million engaging in online shopping. This demographic advantage is expected to fuel the expansion of digital services and online consumption.
The expansion of digital services, such as booking travel online, ordering food through digital platforms, consuming digital media, and engaging in online advertising, is anticipated to drive the overall growth of India’s internet economy. India’s internet economy is projected to grow to $1 trillion by 2030 from $175 billion in 2022. It is expected to contribute 62% to the technology sector by 2030, up from 48% in 2022 and is projected to account for 12-13% of the country’s GDP, compared to 4-5% in 2022. This growth is attributed to increased digital demand in tier 2+ cities, digitization of traditional businesses, and the success of India Stack.
Transforming Citizen Experience
Digital India transforms various interactions with the citizens, making government services more accessible, efficient, and citizen centric. E-governance initiatives or Indian Stack of digital public services such as the Digital Locker, e-Procurement, and the Unified Payments Interface (UPI) streamline administrative processes, reduce paperwork, and enhance transparency and significantly contribute to the growth of India’s internet economy. Additionally, the emergence of open networks like ONDC, OCEN, and UHI would create new opportunities for various sectors.
UPI has transformed digital payments in India, facilitating seamless and instant transactions between bank accounts. UPI’s widespread adoption has driven the shift from cash to digital payments, driving a digital economy and empowering individuals with greater financial inclusion. Unified Payments Interface (UPI) was officially launched in India on April 11, 2016. The National Payments Corporation of India (NPCI) introduced UPI to facilitate seamless and instant fund transfers between banks through mobile devices. Since its launch, UPI has gained widespread adoption and has become a key component of the digital payment ecosystem in India. In September 2021, UPI recorded over 2 billion transactions. With 157 banks and 30+ app providers integrating UPI, reflects its diverse applications, including P2P transfers, bill payments, and e-commerce transactions. Government initiatives like Make in India, and GST have propelled B2B e-commerce in India by enhancing business operations, promoting digital transactions, and fostering a conducive environment for growth. By August 2023, UPI had crossed 10 billion transactions. Moreover, the total transaction value for August reached Rs 15.7 lakh crore. In FY 2023, the annual transactions were valued $1.7 trillion, with $380 billion in merchant payments. India actively shared its UPI technology with various countries, including France, Australia, Singapore, UAE, Saudi Arabia, Oman, Nepal, Bhutan, Sri Lanka, and others.
UPI has become a popular and widely used method for digital payments in India, offering a convenient and secure way to perform various financial transactions. Unified Payments Interface (UPI) is a real-time payment system in India that enables users to link multiple bank accounts to a single mobile application. It facilitates instant money transfers between two banks using mobile devices with the help of the National Payments Corporation of India (NPCI) infrastructure. UPI allows users to make payments, request funds, and perform various financial transactions directly from their bank accounts. 24/7 Availability: UPI transactions can be initiated and completed at any time, including weekends and holidays. Immediate Fund Transfer: UPI enables instant money transfers between bank accounts in a secure and efficient manner. Single Mobile Application: Users can link multiple bank accounts to a single UPI-enabled mobile application, eliminating the need for multiple banking apps. Virtual Payment Address (VPA): Users are identified by a unique VPA, which acts as an alias for their bank account. This simplifies the process of sending and receiving money. QR Code Payments: UPI supports payments through QR codes, allowing users to scan codes for quick transactions. Bill Splitting and Collections: Users can split bills among friends and family, and businesses can collect payments easily through UPI. Security Measures: UPI transactions are secured with two-factor authentication, ensuring the safety of financial data.
As of October 2023, according to the most recent data from NPCI, PhonePe constituted 46% of UPI transaction volumes, Google Pay accounted for 36%, and Paytm contributed 13%. In contrast, in October 2022, PhonePe held a slightly higher market share of 47%, Google Pay had 34%, and Paytm represented around 15%. In March 2023, the trio of PhonePe, Google Pay, and Paytm collectively dominated the UPI landscape, constituting 94% of transactions by volume and 96% by value. This data is sourced from the India Finance Report for FY23 by the Centre for Advanced Financial Research and Learning (CAFRAL). Google Pay has achieved remarkable success by integrating with UPI, the primary retail payments system in India. As per India’s Ministry of Finance, UPI transaction volume has witnessed a substantial rise, surging from 920 million to 83.75 billion since 2018. Simultaneously, the value of these transactions has seen a significant increase from 1 trillion Indian rupees ($12 billion) to 139 trillion Indian rupees ($1.7 trillion). Notably, the most successful digital payment applications in India are those that have established a robust presence on the UPI platform.
ONDC – Government Initiative to Transform e-Commerce
E-commerce in India has witnessed remarkable growth over the past decade. Launched in 2021, Open Network for Digital Commerce (ONDC), an initiative by the Government of India, aims to foster an inclusive digital commerce ecosystem in India, addressing challenges faced by SMEs, startups, and local vendors against larger platforms and promote fair competition, consumer protection, and data sovereignty.
ONDC promotes interoperability among different e-commerce platforms and digital service providers. It encourages the development of standardized APIs (Application Programming Interfaces) that enable seamless integration and collaboration among various players in the digital commerce ecosystem. This helps the cause to promote innovation, enhances user experience, and encourages the development of new and creative solutions. Enhancing logistics infrastructure, such as last-mile delivery networks and efficient supply chains, is vital for the continued expansion of B2C e-commerce. Investments are being made to ensure prompt and dependable delivery, particularly in tier 2 and tier 3 cities.
Bridging Digital Divide
To bridge the digital divide, Digital India focuses on promoting digital literacy, skill development and entrepreneurship. Programs like the National Digital Literacy Mission (NDLM) and the Pradhan Mantri Gramin Digital Saksharta Abhiyan (PMGDISHA) have been instrumental in imparting digital skills and knowledge to individuals across the country. Candidates trained under NDLM and PMGDISHA have been equipped with the skills required for jobs in various sectors, such as e-commerce, data entry, digital marketing, and more. These initiatives have empowered citizens in rural areas, to leverage technology for personal and professional growth.
Digital India has fostered a vibrant start-up and innovation ecosystem in the country. Initiatives like Start-up India, Stand-up India, and Atal Innovation Mission have provided support, funding, and mentorship to aspiring entrepreneurs. India’s booming startup ecosystem has seen the rise of tech-based ventures in e-commerce, fintech, healthtech, edtech, and food delivery, attracting substantial investments and driving internet economy growth. The availability of funding, supportive government policies, and a thriving start-up culture are driving innovation and contributing to the growth of the internet economy. There were 41,317 startups in India in 2020, as recognized by the Department for Promotion of Industry and Internal Trade (DPIIT). “The Rise of Digital Bazaars in India” report, a collaborative effort by Bain & Company and Accel, reveals that Indian start-ups have emerged as a magnet for substantial investment. The sector has witnessed a deluge of over $30 billion in funding, painting a vivid picture of robust investor enthusiasm and unwavering confidence in the potential of these entrepreneurial ventures.
Digital India has focused on ensuring inclusion and accessibility for marginalized communities. Projects like Common Service Centers (CSCs) have brought digital services to rural areas, enabling access to banking, healthcare, and government schemes. Initiatives like Direct Benefit Transfer (DBT) have reduced leakages and improved the delivery of welfare benefits to the intended beneficiaries.
With the increasing adoption of digital technologies, ensuring cybersecurity and protecting digital privacy have become critical. Digital India places significant emphasis on strengthening cybersecurity measures, establishing cyber centers, and promoting awareness about safe online practices. It aims to build a secure and trusted digital ecosystem for citizens and businesses.
Conclusion:
Digital India has emerged as an inevitable force, propelling metamorphosis towards its digitally unified and inclusively harmonized goal of one vibrant economy of netizens. Through its comprehensive initiatives, it has already connected millions of citizens, improved governance, fostered innovation, and empowered individuals with digital skills. The journey towards a fully digital and inclusive India continues, and Digital India serves as a beacon of hope for a technologically empowered nation.
However, challenges such as bridging the digital divide, ensuring data security, and expanding digital infrastructure remain. As Digital India progresses, it is crucial for stakeholders, policymakers, and citizens to collaborate and address the evolving needs and challenges of a digital society through competitive development and prudent deployment of emerging technologies across the sectors.
