India’s economy has leveraged technology to reshape itself, bolstering its growth compared to other major economies. Schroders believes that the tech-driven transformation has also yielded societal benefits and environmental improvements, along with revolutionising how Indian capital markets operate. 

“The speed of adoption of Aadhaar together with other government initiatives has also led to a sharp increase in the number of bank accounts…it would have taken 47 years to achieve 80% of adults with a bank account had India solely relied on traditional growth processes. India did it in seven years with the help of technology,” writes Jigar Gandhi, India Investment Specialist at Schroders. 

Subsequently, he talks about how a surge in the number of bank accounts laid down the groundwork for the country’s digital payments system to flourish. The asset manager points out that the Unified Payment Interface (UPI), introduced in 2016, has made India the global leader in digital transactions. It also highlights that other factors, like the affordability of data, have fueled widespread internet adoption and reduced reliance on cash in India’s economy.

Furthermore, Gandhi contends that technological advancements have enhanced government benefit distribution, cutting time and costs. Then, he goes on to talk about how indirect tax reforms in the country have boosted the frequency of tax filings, providing a stable cash flow for the government. 

Schroders then sheds light on the positive effects of the cashless toll payment mechanism called FasTag on India’s economy. “The Ministry of Road Transport and Highways in India estimates that by implementing FasTag, around 350 million litres of fuel were saved in 2021, preventing around 9.8 million tons of carbon dioxide emissions,” informs Gandhi. 

Additionally, the asset manager suggests that technology has not only helped in upgrading India’s physical infrastructure but has also influenced how Indians invest, with the country witnessing a rise in equity investments. 

“The listed new age tech-enabled companies are parts of different sectors such as finance, consumer discretionary, retail, communication services, defence, and even utilities. Incumbents have also adopted technology to grow and retain market share,” said the asset manager. 

Read the full insight here.