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The Reserve Bank of India (RBI) introduced the Digital Payments Index (DPI) in January 2021 to measure the extent and growth of digitization in the Indian payment ecosystem. With March 2018 as the base year, the RBI-DPI provides a comprehensive framework for assessing the country’s progress toward adopting and implementing digital payment systems. This index tracks changes in the digital payment infrastructure, usage, and consumer behaviour over time, offering policymakers and stakeholders valuable insights into the performance and challenges of digital payment adoption in India.
The DPI in India has shown remarkable and consistent growth over the six years, from 100 in March 2018 to 445.5 in March 2024, representing a more than four-fold increase in digital payment adoption and usage across the country. This substantial growth underscores India’s significant progress towards a less-cash society and embracing digital financial technologies. The trajectory of the DPI reveals several interesting patterns. This growth was particularly steep in the initial years, with the index jumping to 153.47 by March 2019, indicating a 53.47% increase in just one year. This rapid initial growth suggests a strong push towards digital payments, possibly driven by government initiatives, technological advancements, and changing consumer behaviours. The COVID-19 pandemic accelerated the adoption of digital payments. Between March 2020 and March 2021, the DPI surged from 207.84 to 270.59, marking one of the most significant year-over-year increases in the dataset. This spike reflects the shift towards contactless transactions and online shopping during lockdowns and a general aversion to handling physical cash due to health concerns. Post-pandemic, the growth rate of the DPI has moderated but remained robust. The DPI continued to climb steadily, reaching 395.57 by March 2023 and 445.5 by March 2024. This sustained growth indicates that the shift towards digital payments was not just a temporary response to the pandemic but represents a lasting change in payment habits and financial infrastructure. It’s worth noting that the DPI shows a consistent upward trend in both March and September readings each year, suggesting continuous progress without significant seasonal fluctuations. This steady growth points to ongoing improvements in digital payment infrastructure, increased consumer trust, and possibly supportive regulatory environments. The most recent data point of 445.5 in March 2024 represents a 345.5% increase from the base period. This remarkable growth over six years highlights the transformative impact of digital payments on India’s financial landscape. It suggests widespread adoption across various sectors of the economy and potentially indicates improvements in financial inclusion and economic formalization.
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