India has many advantages that can be encouraging of innovation to a public-funded digital infrastructure. Explain (200 Words)
Refer - Financial Express
Enrich the answer from other sources, if the question demands.
IAS Parliament 3 years
KEY POINTS
· India’s approach to public digital stack. India’s political establishment, across party lines, has accepted the idea of “public digital goods”, which means that a minimum foundational digital infrastructure is provided either directly by the government.
· Based on this foundational digital infrastructure, private competition thrives. The UPI protocol, which is behind the success of digital payments, is run by NPCI as a non-profit institution with no monopolistic “winner takes all” profit ambitions, unlike the digital giants of the West.
· India’s banking market structure is conducive to embracing change. India’s banking has been dominated by state-owned banks who work on hybrid priorities, where market development is as important as shareholder returns.
· RBI’s reluctance to let large industrial houses into banking implies the banking industry has no strong political connection to lobby against change that threatens its short-term commercial interests.
· India has a strong banking regulator in RBI, which has slowly and steadily embraced the idea of digital and innovation. Regulators have to be conservative by their mandate.
· Success of digital payments emboldens the regulator that it can achieve the goals of financial inclusion and deepening without compromising on systemic risks.
· The Indian consumer can look forward to the ease of pervasive and convenient borrowing as she does in payments today.
