2019-01: Digital Revolution, Financial Infrastructure and Entrepreneurship: The Case of India

By Arvind Panagariya

• Digital Revolution has been sweeping across the world over the last three decades.  This revolution has spread far more rapidly, especially in developing countries, than was the case with either the Industrial or Agricultural Revolution.  Indeed, the spread has been so rapid that China has become its major driver with India emerging as one as well.

• This paper is devoted to two aspects of the Digital Revolution as it impacts India: financial technology or fintech, and innovation and entrepreneurship.  As in other countries, the spread of digital technologies has led to a dramatic transformation of financial infrastructure in India. On the one hand, this has improved efficiency and on the other it has led to increased financial inclusion.  The government’s payments system has evolved to a point that it can make payments directly to individuals and firms through bank accounts. Individuals are seamlessly able to transfer funds from their bank accounts to those of others. Businesses and customers can transact digitally in real time.