The government has shifted the goalposts of the currency demonitisation from black money and fake currency, to the cashless economy and linked it to the goals of its flagship programme, Digital India. This has brought into focus the use of information technology in the banking sector as well as for financial transactions.
Technology has made a lot of difference to our banking, financial and insurance sectors in the past three decades. Combined with other tools and databases like the UID, it has helped banks bring millions of Indians into the fold of formal banking. But the sudden push to cashless economy via demonitisation is a different thing altogether.
It's great to quickly get a bank account by using technology or to get an SMS alert from one's bank, but it's a whole different thing to use your mobile phone to make a financial transaction on the go. It will be a fallacy to equate the ability of ordinary Indians to use a mobile phone with their willingness to replace their purse or wallet with their phone.
The technological change the government is trying to usher in can't take place in vacuum. Technology adoption is a complex process. Government orders or currency shortage can't force people to adopt to a new technology.
Widespread adoption of any new technology needs necessary infrastructure, awareness among citizens and their willingness to accept the change.
Widespread adoption of any new technology needs necessary infrastructure, awareness among citizens and their willingness to accept the change.
All this has a social and political context too. A favourable regulatory environment is also a prerequisite.
Several of these building blocks needed for cashless economy are currently missing.
Just a few months ago, the World Economic Forum released the Global Information Technology Report for 2016. Out of 139 countries ranked in the Network Readiness Index (NRI), India stood at 91. On two counts – availability of infrastructure and level of skills among people – India ranked even lower (114 and 101 respectively).
In terms of individual use of information technology, India's rank was 120 out of 139 countries surveyed.
China got an overall rank of 59, and of course, Singapore topped the global ranking. The report also analysed the reasons behind India's low rank in technology adoption.
A third of the Indian population is still illiterate and a third of our youth are not enrolled in secondary education. Technology penetration is pathetic – only 15 out of 100 households have access to the internet, and mobile broadband just reaches a few. There are just 5.5 subscriptions for every 100 people.
One can argue that this was in July and the data may have been even older. So, if the figures have changed, the government must let us know the new parameters for technology adoption.
India has been doing pretty well in developing an ecosystem for making ICT affordable – with a ranking of eight. While we are also doing a good job in promoting IT industry and creating jobs, we lag behind in technology dissemination and adoption.
India has been doing pretty well in developing an ecosystem for making ICT affordable – with a ranking of eight. While we are also doing a good job in promoting IT industry and creating jobs, we lag behind in technology dissemination and adoption.
Unless this gap is bridged, we won't be able to make progress towards goals like cashless economy.
People take to new technologies when they see clear benefits, trust the providers, find it convenient and can afford it.
The mobile wallet is a long way from fulfilling these basic criteria.
The Article First appeared In Mail Today
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