DIGITAL TRANSFORMATION OF INDIA'S FINANCIAL ECOSYSTEM
DOI:
https://doi.org/10.29121/shodhkosh.v5.i6.2024.5211Keywords:
Digital Economy, Cashless Economy, Demonetization, Upi, Financial InclusionAbstract [English]
India's financial landscape has experienced a significant transformation over the past decade, driven by policy changes and the expansion of digital infrastructure. The push towards a less-cash economy gained momentum post-2016, with digital payment systems reaching remote areas. This shift has impacted the economy, social behavior, and financial habits. The 2016 demonetization, which invalidated high-value currency notes, was a key event, accelerating the adoption of digital platforms like UPI and mobile wallets. India's transition is shaped by its diverse demographics, with challenges like limited internet penetration and low digital literacy. Government initiatives, including the Digital India campaign and Aadhaar-linked bank accounts, have been crucial in promoting digital adoption. This paper explores the evolution of India’s financial ecosystem, analyzing policy efforts, technological progress, infrastructure advancements, and changing user behaviors. India's example highlights how developing countries can use digital innovation to modernize their financial systems. The transition from a cash-dominated economy to a digitally-driven one has brought about substantial changes, with increased digital transactions, the widespread use of QR codes, and a push for financial inclusion. While challenges like uneven digital access and data security remain, India's progress serves as a blueprint for digital financial reform.
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