Finance Minister Nirmala Sitharaman, who’s on a seven-day visit to the U.S., during a talk at Wharton Business School, University of Pennsylvania, said over 51 ministries and departments in the central government deal with direct benefit transfers (DBT) and over $450 billion have been transferred cumulatively in the last 8 years, which has saved pilferages worth $40 billion in this period.
"Big deal for me...as a finance minister, I need to stop the pilferage. I need to make sure every taxpayer's rupee is spent properly, accounted properly. I can't have pilferages taking over."
The FM says the "digital experience" of India is a superb lesson in cutting pilferage. "Fraudulent transactions and ghost account holders have all been eliminated from the system."
It doesn't stop there, she says. "Even the transactions between the Centre and states, or the provinces, go through digitally. There is no manual book of entry transactions."
She says digitalisation has helped India become efficient with "every rupee". "We've created a single-modal account system, through which every money which goes to the state is through that account, and just in time, when you say, I'm ready to launch this project, the province gets the money from the Centre."
For the end consumer, the FM says, because of digital transparency, banks are credit rating them. "Even small ticket loans are now getting done because the digital footprint is available."
The FM says 90 million people are using the account aggregator passthrough to get small-ticket loans from banks in India. "For small transactions, a customer still gets rated, his data is shared (after permission) through the account aggregator to the banks, and the banks lend them money at discounted, sometimes subsidised, interest."
She says when one talks about the robustness of India's economy, it is because of these small things. "Of course, now you know the story of UPI, I don't need to say the QR code and everything else. The Reserve Bank has come up with a unified lending interface so even lending becomes all smooth, friction-free, based on all the data which is already available."