Cloud technology propels India’s financial inclusion mission

Data from World Bank’s Global Financial Inclusion Database shows that 80 percent of India’s population owned a bank account in 2017. The first step to narrow the financial inclusion gap between Indian citizens in urban and rural areas is for the government to extend financial services to the underserved. To work towards this goal, the government announced the Pradhan Mantri Jan Dhan Yojana (PMJDY) as the national mission for financial inclusion in 2014 and then launched the Digital India program the following year. The PMJDY aims to provide every citizen with affordable access to savings accounts, remittance, credit, insurance, pension, and more.

The impact of the Digital India Program

Launched in 2015, the program aims to transform the country into a digital economy. The goals of the program are to drive digital infrastructure as a core utility for every citizen, provide government services on demand, and support the digital empowerment of constituents. For example, the Indian government is working to connect remote villages with high-speed internet to ensure that people across the country can reach digital government services.

The government encourages citizens to open bank accounts digitally to receive federal benefits and scholarships quickly. Within two years of the program launch, 80 percent of the population owned a bank account—a 30 percent increase. As of 2020, 422 million beneficiaries opened their accounts in public, private, and regional rural banks.

According to The Economic Times, as many as 6.35 crore income tax returns have been filed electronically through mid-February this fiscal year, up from 6.28 crore in 2018-19. In a written reply to a question in the Lok Sabha, Minister of State for Finance Anurag Singh Thakur said the number of assessees filing income tax returns (ITRs) has consistently increased during the last three years as well as in the current year.

The Reserve Bank of India hired business correspondents (BCs) to act as banking representatives in areas without branches. Local post offices also served as key centres for citizens to perform financial transactions in person when needed. With technological advancements in the private sector such as digital wallets, Aadhaar-enabled payment systems in mobile automated teller machines (ATMs) and points-of-sale (POS) machines, the government saw an increase in financial transactions and number of customers signing up for bank accounts.

The success of the Digital India program was most visible during COVID-19 and the subsequent nationwide lockdown in March 2020. With the majority of the population owning a banking account, the disbursement of relief funds, emergency loans, and subsidies was more efficient.

Innovating in the cloud to drive financial success

Mission-driven startups in the private sector collaborated with Amazon Web Services (AWS) to design and deliver new products in the cloud that helped advance financial inclusion in India. They worked on a range of challenges, from boosting credit growth to bringing citizen services through platforms.

For example, Punjab Municipal Infrastructure Development Company (PMIDC) enabled citizens in 168 urban local bodies (ULBs) in Punjab to apply for more than 60 municipal services digitally using Digit. The technology platform developed by the eGovernments Foundation empowered citizens to apply for services such as water and sewerage connections, pay water charges, file grievances, and apply for trade licenses. Collections from ULBs surpassed Rs 500 crore (or approximately 67 million USD), and PMIDC issued more than 18,000 trade licenses through the platform. “Hosting Digit on the AWS Cloud enabled the faster rollout of 12 identified applications in less than six months,” said Ajoy Sharma, chief executive officer of PMIDC.

Odisha-based Unmiti built a digital platform to enable organizations to launch, coordinate, and track the impact of their projects. The Government of Odisha’s Project for Livelihood mission, which has affected the lives of 25,000 farmers so far, used their solution. The application generates QR-code sample IDs with coordinates capturing details of the farmer and the farm’s cropping patterns and source of irrigation. This application has been used to sample 15,000 samples to date.

Lastly, agri-fintech startup Whrrl addressed issues around fraud in warehouse management and financing through their blockchain and QR solutions. They empowered more than 3,000 farmers, directly or through Farmer Producer Organization (FPO), to easily get access to loans and increase their income. Their solutions also helped banks to secure their lending mechanism. Warehouses can monitor their capacity effectively, boost revenues, avoid frauds, and reduce issues of duplicate receipts.

Looking ahead

Ultimately, for India to achieve complete financial inclusion, public, private, regional, and startup organizations will have to collaborate to widen their distribution and delivery network with new and emerging technologies.

Learn more about how cloud technology can help AWS customers drive financial inclusion through this eBook: Serving a Digital-first India – Technology for progress and inclusion.

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