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Empowering rural areas to make transactions seamless

The Indian government has been long trying to enter the realms of a cashless economy and fully incorporate digital payments as a universally accepted mode of transaction, even in the rural pockets of the country. But it was only in the bleak times, hauled by the Covid-19 pandemic, that monetary digitalisation picked up the pace. It has emerged as a silver lining for the digital financial sector in India. To provide a digital push, specifically in rural India, the Ministry of Electronics and IT (MeitY) launched a scheme called “Digital Finance for Rural India: Creating Awareness and Access through Common Service Centres (CSCs)”. It aimed at setting CSCs as Digital Financial Hubs, by spreading awareness regarding government policies and digital finance options available for rural citizens. To thrust the project with the desired velocity, the government put in a liberal investment of ₹ 65.625 crores to popularise different digital financial services such as IMPS, UPI, Bank PoS machines etc.

The financial inclusion drive was off to a slow start due to infrastructural challenges, but soon, the attitude towards technology changed with the advent of more suppliers and schemes powered by both public and private sectors. One of the few that stood out among the rest included the Reserve Bank of India’s call to create a Rs 345-crore Payments Infrastructure Development Fund (PIDF) to encourage digital payments in Tier III to VI centres in the seven North-eastern states. RBI’s announcement, made earlier this year, led to the setting of Points of Sale (PoS) infrastructure in both physical and digital form. It aimed at enhancing the digital payment experience, services and access for small towns and villages. 

Another popular Government initiative, which soon became a household name, was Prime Minister’s Digital India programme. The campaign launched on July 1 2015, introduced new initiatives to ensure that the citizens could digitally access all government services with the help of high-speed internet, including the rural Indian population. Besides, the country also welcomed Bharat Net Project. It is a flagship mission promoted by the Government of India to boost internet services, e-banking, e-governance, and e-education among the rural population. The plan aimed to connect every 2,50,000 Indian Gram Panchayat and offered 100 Mbps connectivity to achieve the same. Besides, the other schemes which promoted digital literacy and empowerment in interiors of the country included Pradhan Mantri Jan Dhan Yojana (PMJDY), Direct Benefit Transfer (DBT), Atal Pension Yojana, and RuPay cards.

Various fintech start-ups and giants corporations have also contributed to accelerating the digital revolution, especially in rural areas, given the extensive market which rests there. One of the unique features of digital payments has been their ability to access the areas that even banks could not access. Though, the digitalisation campaign is yet to reach its optimum potential. Their motto is to encourage smooth and easy digital transactions in remote parts of the country, as it will benefit both people and companies. The expansion of digital platforms to the hinterlands of the country is one of the key indicators of economic growth, which was otherwise hammered by the covid surge and restrictions. A McKinsey report highlighted that despite the propagation of urbanisation, the rural population is likely to form 63% of the total market share in India by 2025. With mobile and internet reaching all corners of the nation, rural India is now becoming increasingly well-versed with the digital mode of payments.

Among its ripple effect lay the financial empowerment of both men and women, boosting the economy and the country’s Gross Domestic Product (GDP). India, which was otherwise hugely cash-driven, is gradually transitioning towards a cashless and paperless economy. It has been made possible with the years of groundwork and initiatives sponsored by the Government and fintech companies in India. Today we have an array of digital bill payment services targeted towards rural India. Thus with the broader and deeper spread of digital empowerment, India would soon be able to bridge the existing digital gap and capitalise on the unexplored market. 



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Views expressed above are the author’s own.



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