India's digital economy is expected to witness exponential growth to $800 billion by 2030 on the back of rising internet penetration and increasing income, Finance Minister Nirmala Sitharaman said on March 11. Addressing the IIT Bombay Alumni Association virtually, she said India has over 6,300 fintechs, of which 28 percent are into investment technology, 27 percent into payments, 16 percent into lending and 9 percent into banking infrastructure, while over 20 percent are into other fields.
So, they are spread across different activities and not concentrated, she noted. "At the same time, the digital economy in India is being pegged at USD 85-90 billion in the calendar year of 2020 and that will see an exponential rise to USD 800 billion by 2030. They should be reaching USD 800 billion in the backdrop of increased internet penetration, rising incomes and also the young Indian population," she said.
The government has made it easier in terms of smooth and easy access to the stock markets, with technology such as e-KYC and e-Aadhaar helping the retail investors come into the market, she said. The total number of retail investor accounts has almost doubled, from about 45 million as of March 2016 to 88.2 million by March 31 2021, she added.
Quoting a report, she said a 10 percent rise in internet penetration results in an increase of 3.9 percent in GDP per capita. Talking about the push to the digital economy, she said the recent Budget has announced setting up of 75 digital banking units (DBUs).
"They may function from one place but they may serve any number of districts but we are also targeting 75 districts to be covered and I guess the DPU will promote better accessibility of banking services, affordability, convenience, and also more control over their own finances for the customers by providing a one stop digital banking account or digital banking," she said.
In her Budget speech earlier this year, she had said, "In recent years, digital banking, digital payments and fintech innovations have grown at a rapid pace in the country. Government is continuously encouraging these sectors to ensure that the benefits of digital banking reach every nook and corner of the country in a consumer-friendly manner."
