GS3 – Indian Economy
Context
Findings from CAMS 2022–23 (NSSO) reveal that although India leads in real-time digital transactions, a vast section of users lack the skills to perform basic digital financial operations, exposing a significant gap in digital financial literacy.
Digital Divide: Key Gaps
- Access vs. Ability
- India processes 50% of global real-time digital payments.
- Despite 87% fintech adoption, only 31.7% of digital device users can use digital banking tools.
- Rural–Urban Divide
- Urban Users: 43.48% can transact digitally.
- Rural Users: Only 24.95% can, due to infrastructure and awareness deficits.
- Age Divide
- Highest capability: 43.7% among 26–35 age group.
- Sharp decline to 18.4% in users aged 60+, due to fear of fraud and unfamiliarity.
- Gender Divide
- 21.1% of women can transact digitally vs 39.9% of men, reflecting gaps in access, education, and digital autonomy.
- Economic Divide
- In poorest rural quintile: Only 13.56% can use digital banking.
- Even in the wealthiest rural quintile, over 60% remain digitally excluded.
Consequences
- Welfare Exclusion: Over 7 crore MGNREGA workers excluded due to Aadhaar-linked payment mechanisms.
- Cybersecurity Risks: Digital frauds and scams tripled (2022–2024), with a 21x increase in financial losses.
- Deepening Inequality: While private players shift to 5G, BSNL still lags at 4G, widening the digital access gap.
- Governance Impact: Undermines e-governance, financial inclusion, and social welfare delivery.
Recommendations
- Infrastructure Expansion: Improve broadband and mobile access in underserved areas. Provide subsidized internet and devices.
- Inclusive Design:
- Simplify UI/UX for seniors and first-time users.
- Localize content in regional languages.
- Ensure accessibility for persons with disabilities.
- Targeted Interventions:
- Focus on women’s access and training.
- Launch regional digital literacy campaigns.
- Cybersecurity Awareness:
- Conduct grievance redressal workshops.
- Promote cyber hygiene practices.