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.
Based on the RBI Digital Payment Index data from March 2018 to March 2024, we can observe a significant and consistent growth in digital payments in India. The index, which started at a base value of 100 in March 2018, has shown a remarkable increase to 445.5 by March 2024, representing a more than fourfold growth over six years. The trajectory of this growth is particularly noteworthy. In the initial years, we see substantial year-on-year increases. For instance, from March 2018 to March 2019, the index jumped from 100 to 153.47, indicating a 53.47% growth in just one year. This rapid initial growth suggests a strong adoption of digital payment methods during this period, possibly driven by government initiatives, increasing smartphone penetration, and improved internet connectivity.
The growth continued to accelerate, with the index reaching 207.84 by March 2020, more than doubling from its base in just two years. This period coincides with the onset of the COVID-19 pandemic, which likely acted as a catalyst for digital payment adoption as people sought contactless transaction methods. The pandemic’s impact becomes even more evident in the subsequent periods. From March 2020 to March 2021, the index surged from 207.84 to 270.59, showing a robust growth despite economic challenges. This suggests that the pandemic significantly accelerated the shift towards digital payments in India.The momentum continued in the following years, with the index crossing the 300 mark in September 2021 and approaching 400 by March 2023. The most recent data point of 445.5 in March 2024 indicates that the growth, while still strong, may be starting to stabilize at a high level.
This consistent upward trend reflects India’s successful transition towards a more digital economy. Factors contributing to this growth likely include government policies promoting digital transactions, the proliferation of fintech companies, increased smartphone usage, and changing consumer behaviours. The data suggests that digital payments have become increasingly integrated into the daily lives of Indian consumers and businesses, indicating a significant shift in the country’s financial landscape.
References
- Reserve Bank of India – press releases. (n.d.-b). https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=56104
- Ibef. (2024, July 29). Digital payments increase 12.6% at March-end 2024, shows RBI data. India Brand Equity Foundation. https://www.ibef.org/news/digital-payments-increase-12-6-at-march-end-2024-shows-rbi-data
- The Hindu Bureau. (2024, July 29). RBI’s Digital Payments Index increases across all parameters. The Hindu. https://www.thehindu.com/business/Industry/rbis-digital-payments-index-increases-across-all-parameters/article68461451.ece
About Author:
Pankaj Chowdhury is a former Research Assistant at the International Economic Association. He holds a Master’s degree in Demography & Biostatistics from the International Institute for Population Sciences and a Bachelor’s degree in Statistics from Visva-Bharati University. His primary research interests focus on exploring new dimensions of in computational social science and digital demography.
Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the views of 360 Analytika.
Acknowledgement: The author extends his gratitude to the Reserve Bank of India for providing data support.
This article is posted by Sahil Shekh, Editor-in-Chief at 360 Analytika.
