In the era ofindustrial revolution of the late 18th and 19thcenturies, one seminal force has impacted everything. Today, the world iswitnessing an even more histrionicturnaround due to the consolidation of manypervasive disruptive forces, especially in the domain of technology. WhereG20’s Global Partnership for Financial Inclusion (GDPFI) in 2016 paves the wayby establishing High Level Principles (HLPs) for digital disruption throughfinancial inclusion.
Despite of our awareness on these alterations, most of thecurrent studies have failed to comprehend its 2nd and 3rdorder effects that might result. Much as waves can amplify one another, thesetrends are gaining strength, magnitude and influence as they interact with,coincide with, and feed upon one another with no precedents from thepast.Therefore, the present study aims at determining the digital financeeffect on economic growth and financial inclusion indicators in India. Whereeconomic growth is proxied by macroeconomic growth indicators, financialinclusion by credit penetration and digital finance by different digital modesincluding usage of teller-machines, internet-banking, plastic currency etc. Theresearch design opted is primarily descriptive along with supporting empiricaltesting using simple OLS framework based on secondary data sources. Findings ofthe study are quite mixed in nature. There is ambiguity in clear directpositive or negative associations among the growth measures with digitalfinance modes. The same may be due to partial reach and awareness of digi-modesacross the nation as a whole.
On the other hand, testing results of digitalfinance on credit penetration are as per expectations to be positively linked.One prevailing critical factor that emerged for this relationship to hold isthe operating cost to adapt to the financial services revolution by thefinancial sector of the economy. Bridging the gap of demand-supply sideconstraints and digital awareness remains at the centre of such services so asto includepoor in the digital space.In this scenario, the future Indian economypromisesrapid growth that necessitates the people to be financial literate, tostart with. More government-to-person (G2P) and person-to-all (P2ALL)initiatives could be developed similar to direct benefit transfers (DBTs) andother transfer payments. The stakes arehigh that constantly urge towards policy leadership and coordination amongprivate and public players so as to push the digital way forward.Thus, ‘Digitalfinancial literacy’ needs to bereinforced towards holistic inclusive growth.
Additionally, the think-tanks need tobe vigilant for monitoring the legal and regulatory technology (Regtech)framework that is predictable, fair and technology-neutral. Finally, the studyrecommends that such moves are not an end in themselves rather expected toshoulder the responsibility of creating new economic order in Indiaviafinancial inclusion toolbox through sustainable development goals (SDGs). Theunderlying policy implication lies insuitable targeting of the variouscampaigns for financially stableecosystems through ‘Digitally LiterateFuture’.The faster we adapt and embrace these changes, the smoother will be ourmarch towards asound future.