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Living Digital: The Demonetisation Opportunity
Several villages still don’t have electricity, banks are miles away, people are illiterate etc. Would it then not be wiser to wait till everything was under control? Or should digitalisation be used as the way forward?
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I am no economist. I cannot conclude whether the demonetisation drive is a blunder or the bridge to catapult India into a new economy. However, I do know that the demonetisation drive is a mega opportunity that can transform India.
The Telecom Revolution
No, the telecom revolution did not start with Airtel and Hutch (now Vodafone). The first telecom revolution started in the mid 1980s. A buoyant young Prime Minister, Rajiv Gandhi, a man with new ideas and his key advisor, Sam Pitroda’s focus on telecom, very much like the current Prime Minister’s focus on Digital India, created a revolution of sorts. Over the next few years, STD booths became a bigger employer than any other employment scheme ever. From railway ticketing to phones coming up in small towns, it was an opportunity India milked well.
In a way it created the ground for the next phase of the telecom revolution of cellular networks and now Digital India. Demonetisation is a mega opportunity in waiting for India.
Banking System Access
Even after nearly 70 years of incentives by banks, India had fewer than 400 million people with a bank account till 2013. The Jan Dhan Yojana resulted in opening 125 million accounts, most of which were zero balance till October 2016.
The demonetisation drive has resulted in approximately Rs 13,00,000 crore coming into the banking system. In other words, banking being the only option left now, demonetisation resulted in more Indians getting into the financial system of the country.
New Opportunities Galore
Just like the mid-80’s created an industry out of STD booths resulting in more employment, demonetisation can create jobs and opportunities on a massive scale.
Right from electronic wallets to POS, the entire eco system is an opportunity for Indian entrepreneurs. In fact, from setting up POS, to reaching out to the remote shops in rural India, to educating digital finance to the man on the street, everything will result in creation of more jobs and enterprise. After 8 November, the opportunity for broadband and mobile penetration has probably doubled. To transact you need both the Internet and the mobile. If earlier it was an option now it’s the only choice.
The scale of demonetisation done in India has never been done anywhere in the world before. There is now news about the Australian government, encouraged by India’s demonetisation drive, considering a proposal to demonetise the $100 note.
The Last Word
In India there are many challenges. Several villages still don’t have electricity, banks are miles away, people are illiterate etc. Would it then not be wiser to wait till everything was under control? Or should digitalisation be used as the way forward? In India, the majority population did not have a landline but mobile phones changed that and India became the second biggest mobile phone market after China. While the physical bank may still be a long wait for many in remote areas, thanks to demonetisation, the bank will now come to a person’s hand.
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.