Information and communication technology has witnessed rapid and inclusive transformation in recent times with innovations at their best. Digital economy is enabled by such innovation which has its implications beyond economy to almost all spheres of human lives. Digital economy may thus be summed up as a worldwide network of economic activities, commercial transactions and professional interactions facilitated by an array of robust technology platforms. This type of economy is also known as web economy, internet economy or cashless economy. It is believed to be first introduced in America and later rolled on by several nations including India. In India, digital platforms experienced accelerated access and usage fueled by state run policies and initiatives including demonetization. The pandemic has restricted traditional economic transactions including physical currency exchange, thus creating room to further strengthen the digital economy to a new scale and size.
While the conventional economy was built and developed through centuries with currency notes as a key element to financial transactions, the evolving banking business through the last few decades witnessed technological improvement affecting its business processes to newer changes. Financial institutions, stock exchanges and other enterprises and corporations mutually partnered to next generation platforms for effective and efficient business transactions. In India, digital economy was recognized as crucial to economic development and creation of several entities including NPCI (National Payment Corporation of India) reflected work in that direction.
Information technology has thus, transformed rapidly over the last few years with several new elements comprehensively enhancing the user experience. Internet of Things (IoT), or artificial intelligence are newer developments which have enriched the technology to enable several platforms to digitalized economy
It is now an established fact that nations with stronger internet connectivity and access are frontrunners in adopting digital economy with strong internet penetration. Developing nations including India has limitations to such mass access with internet connectivity limited to selected urban and semi urban areas. Access to remote and rural belts of India is a challenge to improve digital footprints. Affordable internet connectivity is another serious factor that restricts internet penetration with vast Indian population find it difficult economically. Government agencies and service providers are allying to expand to this sector with affordable connectivity. The internet cost in India is one of the lowest in the world. The recent development of stiff competition amongst providers is expected to further slash it to a new low.
The regulator and controller of Indian economy – Reserve bank of India is strongly engaged in its drive to elevate our economy to a digitalized platform. This is aligned with the aspirations of a vast economically underprivileged population. Inclusive participation, effective and decisive regulation holds key to establishment of a strong digital economy in the larger interest of all sections of the Indian community. Creation of regulatory bodies and institutions to monitor and walk the shared platforms including indigenously developed platforms is another step in its direction.
The Reserve Bank of India instructed the banks to introduce their own apps for net banking and online card payments. The online payments apps such as Google Pay, Phone Pay were linked with the banks for payments. It also set guidelines to make all the payments safe and secure fearing fraudulent transactions which are on the rise.
Global players – Google, Amazon etc. are aggressively developing newer platforms to improve the experience. Indian startups with indigenously developed platforms are equal competitors with the local governments assisting with business opportunities and finances.
Post demonetization, Government of India introduced digital economy to make online payments popular and easy replacing cash mode of payments. Traditional banking instruments were replaced digitally with net banking, mobile applications etc. Industries and business houses migrated to such digitalized platforms to its convenience.
On the flipside, the disadvantages of digitalized economy like limited internet access, compromised privacy, fraudulent transactions, user’s knowhow and understanding, infra gaps to connectivity, unnecessary banking charges and importantly increasing failed transactions and user inconvenience thereafter have made these platforms widely unpopular and complicated. These disadvantages are overpowering the key advantages such as huge data depository and access, user experience and convenience, efficient and effective financial transactions, and worldwide ease of doing business.
It is evident and accepted that digital economy is the future. Newer developments and innovations are expected to enhance the platforms. Correction and modification of existing platforms will make the platforms widely accepted and recognized by users with enabled safety features and convenience. Research and development on technology fueled by innovations will surely contribute to the next generation economy which is expected to unfold with more pleasant surprises as we progress. Big data, convenience of online transactions, zero physical transaction, worldwide network and connectivity will provide better and newer opportunities to traders and businesses reasoning justification to migrate to digital platforms. Small time investors and individuals will equally find it convenient to bank upon with added safety features. Digitalized economy will further develop and improve to change human lives to a new way of living.
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