Digital Environment and Economic Stability in India

The Government of India's Digital India initiative aimed at transforming India into a digitally empowered society and knowledge economy is expected to further accelerate awareness, availability and adoption of digital technologies. A digital payments model for social intervention projects provides the level of transparency needed for projects to achieve efficiency objectives. It significantly prevents leakages through theft and payments to unintended recipients of the financial support. A robust digital payments system will provide identification support solutions that help the government eliminate these leakages. This efficiency objective is also achieved as a robust payments system provides long term cost savings by eliminating cost of cash movements. The financial inclusion and efficiency gains associated with ubiquitous access to digital payments systems are very high. Digital payments can reduce transaction costs by up to 90 percent, save the Government more than Rs. 1 lakh crore, and provide accessible financial services to all residents while also lowering costs for financial providers.

The use of electronic payments makes the economy more efficient as well. Increased usage reduces transaction costs and thus improves the flow of goods and services. It helps consumers by making purchasing more convenient and efficient. Merchants in turn can manage their businesses better and benefit from higher sales. This paper attempts to study the impact of digitisation on the economic stability of India.