Nandan Nilekani On India's #DigitalTransformation

Summary

Nandan Nilekani presents an insightful overview of India's ongoing digital revolution, highlighting key developments such as financial inclusion through the Jandan program, mobile phone and data consumption growth, and UPI's rise as a major payment system. He explores the significance of various digital public goods, such as the DigiLocker platform, FASTag, and GST digitization, which have contributed to a more connected and productive economy. Additionally, Nilekani outlines future digital transformations in areas like credit, logistics, and e-commerce that promise to further reshape the country's economy and society.

Highlights

• In just a decade, India has gone from a predominantly unbanked nation to one of the most banked, thanks to the Jandan program 💼.
• Massive growth in smartphone use and affordable data pricing have fueled digital consumption in India 📱.
• UPI, now a leading global payment system, initiated a revolution in digital transactions in India 🏦.
• India's vaccine distribution and educational content went digital, showcasing efficient tech infrastructure 💉🎓.
• Digital public goods in India, like FASTag and DigiLocker, offer secure, convenient services, supporting economic growth 📂.
• India's shift towards a digital economy is creating opportunities for innovation in various sectors, including transportation and finance 🚗💰.

Key Takeaways

• India's digital transformation is rapidly progressing, thanks to innovative programs and technologies 🚀.
• The rise of UPI and other payment systems has made digital transactions commonplace across the country 💸.
• New digital public goods are allowing for unprecedented economic and social inclusivity 📈.
• Future transformations are expected to disrupt credit systems, logistics, and e-commerce, broadening India's digital horizons 📦.
• India's approach to technology promotes collaboration, democratization, and equitable growth 🌍.

Overview

Nandan Nilekani, in his talk, throws light on India's digital journey, a saga of sweeping change covering essential facets of daily life. From financial leaps with the Jandan program to affordable digital connectivity ushered in by smartphone proliferation and cheap data, India has surfaced as a tech-savvy nation. 🚀 The formidable Unified Payments Interface (UPI), launched amidst demonetization, laid the groundwork for unprecedented digital transactions and set a global precedent in payment systems. 🌍

Not just limited to finance, this transformation is evident across various sectors. Digital public goods, such as the DigiLocker and the GST system, have made personal and business transactions seamless, efficient, and inclusive, impacting millions of lives. The government's embracement of a tech infrastructure for vaccination and education further signifies a revolutionary shift towards a highly connected digital society. 📚

As India continues to expand its digital infrastructure, future changes in credit, logistics, and e-commerce pose to redefine market landscapes. This continued evolution, championed by digital public goods, highlights India's approach towards equitable growth and economic collaboration, fostering a robust ecosystem for startups and new enterprises. The narrative is clear: India's digital horizon is broadening swiftly, with innovation at its core. 🤝

Chapters

• 00:00 - 00:30: Introduction to India's Digital Transformation The speaker thanks the audience and organizers for the invitation and expresses excitement about being in Bangalore for the first time. The speaker outlines the goal of the talk: to discuss India's digital transformation within a 30-minute timeframe. The aim is to connect the various ongoing developments in India's digital sector and provide a cohesive understanding of the technological advancements in the country.
• 00:30 - 01:30: Economic Overview and Banking Revolution This chapter discusses the economic transformation of India from a balance of payments crisis in 1991 to a robust financial position with over 500 billion dollars in reserves. Despite global challenges such as rising interest rates and foreign institutional investors withdrawing funds, India maintains a strong Forex balance sheet.
• 01:30 - 02:30: Telecom Revolution and Mobile Data Growth This chapter delves into the telecom revolution and its role in the dramatic increase in mobile data usage. It highlights a significant shift in banking habits facilitated by technological advancements. Previously, a large part of the country remained unbanked. However, programs like Jandan have rapidly propelled the nation from one of the least banked to one of the most banked globally. This transformation, which would've typically spanned decades, has occurred in merely nine years due to accelerated financial processes and policies.
• 02:30 - 04:00: UPI and Digital Payment Evolution The chapter 'UPI and Digital Payment Evolution' discusses the significant strides in financial inclusion in India over the past decade, emphasizing the country's leap in terms of opening bank accounts and enhancing financial services. It highlights the technological advancements and market shifts that occurred around 2016-2017 with the entrance of Jio into the mobile phone market. This entrance led to a remarkable reduction in data pricing, attributed to Jio's strategic insights. The chapter underscores the broader impacts of these developments on digital payment systems and economic accessibility.
• 04:00 - 05:30: Vaccination Drive and Education Digitalization The chapter titled 'Vaccination Drive and Education Digitalization' discusses the inelastic nature of voice demand versus the flexibility of data demand. It highlights how making data more affordable can drastically change user behavior, with an example from India where data consumption skyrocketed from half a gigabyte a month to half a gigabyte a day between 2016 and 2017. This significant increase in data usage demonstrates the potential impact of digitalization, especially in the context of educational advancements and vaccination drives.
• 05:30 - 07:00: Non-linear Change and Digital Public Goods The chapter discusses the simultaneous growth of smartphone usage and the decrease in data costs, particularly in India, making it one of the cheapest in the world for data. During this period, UPI (Unified Payments Interface), a payment system designed by NPCI (with advisory input), was also launched. The concept for UPI was conceived in 2013.
• 07:00 - 13:30: Digital Infrastructure and Economic Transition The chapter titled 'Digital Infrastructure and Economic Transition' discusses the evolution of digital payment platforms in India, particularly focusing on the period around 2016. It highlights the initial launch and slow uptake of the Unified Payments Interface (UPI) in May 2016, which started with 100,000 transactions. A significant boost in digital transactions occurred following the demonetization event on November 8, 2016, when cash availability was restricted in India. This event accelerated the adoption of digital payments. Subsequently, the BHIM (Bharat Interface for Money) application was launched to further enhance digital payment adoption. The chapter also mentions the entry of new players in the digital payments space such as PhonePe, Paytm, and Google Pay. As a result, the platform now handles approximately 7.3 billion transactions.
• 13:30 - 20:00: Financial Inclusion and New Innovations The chapter titled 'Financial Inclusion and New Innovations' discusses the massive scale of digital payment systems in India, highlighting its interoperability and widespread acceptance, with over 260 million users. It also touches upon India's successful vaccine distribution, managing to administer 2.15 billion vaccines in just two years, showcasing its manufacturing capabilities.
• 30:00 - 37:00: Credit, E-commerce, and Logistics Overhaul This chapter discusses the synergy between biotechnology firms like Serum Institute and Bharat Biotech and technological advancements in managing vaccine distribution and documentation. The Indian government launched the Kovin application, a digital platform aiding in the vaccination process by enabling tracking of vaccination doses across different cities. It facilitated the issuance of digital vaccination certificates, simplifying the vaccine management process for individuals and health authorities.
• 37:00 - 40:00: Conclusion on India's Digital Future The conclusion chapter titled 'Conclusion on India's Digital Future' discussed the remarkable growth in digital education in India during the pandemic. It highlighted the success of the Deeksha platform, launched by the government, which facilitated significant learning engagement with 59 billion learning minutes utilized nationwide. Moreover, it noted the technological integration in educational materials, mentioning that every state government-printed Indian textbook now includes around 20 QR codes, showcasing a digital shift in educational accessibility and resource utilization.

Nandan Nilekani On India's #DigitalTransformation Transcription

• 00:00 - 00:30 uh thank you all and uh thank you Manish and everybody else for inviting me here I've never been to this place though it's in Bangalore because but it's great to come here and uh be with all of you so what I'm going to do is in the next uh 30 minutes or so talk about India's digital transformation and basically try to connect all the dots because everybody knows Lots is happening but how do you connect the dots and how do you make sense of it so that's what I plan to do and that's the scope of this
• 00:30 - 01:00 presentation now one thing we know is that for those who are old enough remember in 1991 we had a balance of payments crisis gold had to be sent to London and all that stuff and today we have a very healthy Surplus over 500 billion dollars of reserves even though in a very difficult environment where Global interest rates are going up FIS are withdrawing money all that it's part of that India has a very strong balance sheet on the Forex front and
• 01:00 - 01:30 that's something that we've achieved in the last several years but we also gone from being among the world's most unbanked countries to the most banked countries and essentially several hundred million people have had bank accounts open under the jandan program and essentially what would normally have taken 46 years or 47 years has happened in nine years in other words something happened to accelerate the pace of financial
• 01:30 - 02:00 inclusion in India in the last decade so that we could LeapFrog in terms of bank accounts and other Financial things and then we saw what happened on on mobile phones in in 2016-17 we had you know we had a new entrant into the market with Geo and you could see that there's a dramatic drop in pricing of data consumption because the jio came out with two important insights one is that
• 02:00 - 02:30 voice is demand is inelastic which means that uniform make voice free nobody is going to speak for six hours but if I make data affordable then people are going to watch YouTube all the time or tick tock so on this realization so India's data consumptions in 19 2016-17 went from half a gig a month to half a gig a day so there are 30X increase in data consumption in one year and that also
• 02:30 - 03:00 led to a massive growth in smartphones so both these things happen together the rise of smartphones and of course the lowering cost of data and even today the cost of data in India is among the cheapest in the world and then we had the same time around the same time we had the launch of UPI UPI was a payment system designed by npci where I'm an advisor this idea was conceived in 2013
• 03:00 - 03:30 it was launched in May of 2016. in October 2016 UPI did 100 000 transactions November 8 2016 we had a important event called demonetization and then digital payments became the most important thing and then the beam application was launched and then we had many new entrants into payments like phone pay and paytm and Google pay and today this platform does 7.3 billion transactions a
• 03:30 - 04:00 month which is the volume of transactions in both October and November and it's the world's largest digital payment system designed to be interoperable and is very popular about 260 million Indians use this playment platform and it's very very ubiquitous and then of course we saw that with a slow start India delivered on 2.15 billion vaccines in just two years and this again was not only the fact that we had great vaccine manufacturing
• 04:00 - 04:30 companies like serum Institute and Bharat biotech but also because of the tech infrastructure behind that with the kovin application that the ministry launched which kept track of all the vaccinations you could get your first dose in one city your second dose in another city your your booster dose in a third City and everybody got a digital vaccination certificate which they could store on their phone or store on the cloud and that became very easy to manage this whole process of vaccinating
• 04:30 - 05:00 a billion people and then on the education side the deeksha platform which was launched by the government really took off during the pandemic and today we have you know 59 billion learning minutes have been used across across the country and every Indian textbook which is printed by a state government is now QR coded you may not be aware of this but every textbook has about 20 QR codes per textbook
• 05:00 - 05:30 attached to different topics and there are 600 million textbooks that means there are 12 billion digitally addressable QR codes today in Indian textbooks and therefore you can have content which you can then link and point to any material that you want and the government has now launched a platform called ndr which is essentially opening it up so that you can have Market Innovation on top of the infrastructure which is there in terms of these QR codes and all that so again
• 05:30 - 06:00 education is again another area where there has been dramatic change so what what is all this tell us that in many different ways India is making irreversible non-linear change when we say non-linear change nothing happens for years and then suddenly something happens and it just takes over and we keep seeing that in area and area and therefore when we sit here and we talk about the future and our strategies and our plans and our
• 06:00 - 06:30 Ambitions it's important to know what are the kind of non-linear changes that have happened what is the impact they have had and what are the non-linear changes that are likely to happen and what are the impact they could possibly have and each of these changes contributes to the next change and we have a phenomenon which we call as combinatorial Innovation where all these changes now starting interacting with each other creating new market opportunities and new threats because
• 06:30 - 07:00 they're going to have threats because they're going to commoditize some layer of the stack or they're going to make it so easy for everyone to participate and therefore you have to think of this both as opportunities and of threats and all this has been enabled by a series of Technology Building Blocks and we call these Technology Building Blocks as digital public goods in other words these are essentially enabled or provided by the government and enabled
• 07:00 - 07:30 so that everybody can use it their Universal in nature they're low cost their open architecture and so on and when you think about it the original internet and the original GPS with the first example of digital public goods because these are actually platforms built by government in in that case the US government and only 20 years after they were built they were opened up for private Innovation so we think of this as nothing but extending that same
• 07:30 - 08:00 philosophy that the government or government Partners should enable some fundamental digital rails of public goods on which you can innovate and that's the whole philosophy now what is this doing fundamentally you are going through a massive upgrade think of it as a massive upgrade like when you upgrade from dos to Windows or something like that and India is going from an offline cash informal low productivity economy
• 08:00 - 08:30 to an online cashless formal High productive economy now this is not going to happen in one year or two years it may take 10 years or 15 years but the fundamental building blocks are in place the fundamental momentum is in place and we need to think about how to leverage and take advantage of this massive transition which is one of a kind and happens only once in the history of a country and the important thing is that the model which is based on digital public goods is inclusive it's not about only
• 08:30 - 09:00 you know the avocado economy the five million guys who can ever afford avocados it's for one billion people it's Democratic Open Access and creating the fundamental rails for a billion people to improve their lives now the way way we think about this is digital infrastructure in India is different from digital infrastructure in the western markets and the reason for this is very simple
• 09:00 - 09:30 how do you make money from infrastructure digital infrastructure in the Western World you made money from advertising this shows the you know it's almost what eight hundred eight hundred dollars per person is a per capita Revenue that uh the advertising industry makes from digital advertising and in India it's it's nothing and therefore we have a situation where you cannot make money in India from
• 09:30 - 10:00 advertising in the in the digital world the total revenue of India and digital address maybe three four billion dollars it's mostly with Google and Facebook and a little bit with whichever Whoever has the IPL franchise so that's the way it works there but in the west gigantic firms have been created purely on digital advertising so Google and Facebook together have about 300 billion dollars in Revenue and therefore the whole model was that because the original internet did not have a method
• 10:00 - 10:30 of making payments it was there was no way to make payments because there's no payment system on the internet and therefore the way to make money was to have advertising the way to get advertising money was to get your attention and therefore you have this so-called attention economy where technology is being used to keep you gripped so that you spend more time watching a video or looking at some infuriating email or you know some WhatsApp forwards but that's
• 10:30 - 11:00 unfortunately the way the internet has developed in India we cannot build an internet on Advertising so India's internet is actually built on digital transactions and therefore having that's why the UPI becomes so strategic because you need a very high volume low cost payment system to actually enable actually enable the transactions at scale in The Indian in the India and world so we need a different payment system microtransactions and that's what
• 11:00 - 11:30 we have now these digital public goods that I talked about have not been built in a day they have been built layer by layer over the last 15 years so and each layer the idea is that you cannot build everything at one time so you build each layer and then that layer becomes used and then you build layers but all these layers have been thought through to be interoperable in nature so they all plug each other and overall create that
• 11:30 - 12:00 combinatorial Innovation and the layers include the ID layer the payments layer and the data layer and I'll talk a little more about that now the ideal layer was the other project which I did I joined the government in July of 2009 and I was given a one sheet of paper with my mandate to give every Indian a unique ID there was no digital word in that my mandate but she said what the hell if you're going to do a ID system in the
• 12:00 - 12:30 21st century we should do it digitally and therefore we get a digital ID system which has now about 1.3 billion people on it and very heavily used the daily authentications on aadha today is 80 million a day in other words 80 million times people are using other to verify themselves either with the OTP an iris authentication a face authentication or a photograph of you know or either or a
• 12:30 - 13:00 fingerprint authentication and so it's ubiquitous but not only does it do authentication it also does something called kyc or know your customer and you can essentially over the years aadhaar was made acceptable as a way to open a bank account get a mobile Connection by an insurance policy by a mutual fund and buy a pension and so we have a kyc which enabled everyone to get those Services very quickly and the great example of the use of kyc
• 13:00 - 13:30 was actually reliance jio because reliance jio essentially wanted to give a hundred million people a free mobile Connection in six months but every mobile connection required you to do a kyc and if they've done it the old-fashioned way of paper-based kyc it would have not happened but they happen to use the aadhaar ekyc so they could do an authentication and kyc within two minutes and they could build a platform
• 13:30 - 14:00 to give one million SIM cards a day and hence they were able to do 100 million SIM cards in six months so aadhar kyc played a very crucial role in the massive expansion of uh of uh Geo and other people are using it all the banks the payment Banks all the new Banks all of them use other kyc zerotha built a huge the largest discount brokerage company in the country all using other kyc so fundamentally it not only reduced
• 14:00 - 14:30 time and improved productivity it also reduce the barrier for newcomers to take on income bets and that's important about all these technologies that they also reduce barriers for newcomers and therefore we have to think through the architecture of the firms you want to build so that we understand the new competitive threats that are coming and then of course I talked about UPR 7.3 uh billion transactions and this is something which everybody uses uh and you know it's ubiquitous and it's not
• 14:30 - 15:00 just see in in the world of cards the card population was only the top 20 30 million people in the country in the world of UPI we have 260 million people using up already and now a number of things are happening in the UPI world for example UPI 123 is going to enable UPI on feature phones which are going to be voice enabled in your own language so you can give a payment instruction in
• 15:00 - 15:30 Hindi or Tamil on your feature phone and that is dramatically expand the use of payments by by people UPR light which just got launched allows you to you have an offline UPI so for small value transactions up to a few hundred rupees you don't have to hit the banking server you can do a local transaction that will take a lot of the load of the main payment system by offloading small value transactions and there are many many
• 15:30 - 16:00 other Innovations happening in the UPI world so the UPI world npci has made a public statement that their goal is to go from 7.3 billion transactions a month to 1 billion a day so the goal the stated public goal is 30 billion UPI transactions a month and they also taking it Global so today you can do UPI Acceptance in Dubai you can go and go to a Lulu shop in Dubai and you can pay using UPI
• 16:00 - 16:30 you're going to have cross-border remittances now with UPI India and Singapore are shortly going to launch a real-time payment cross-border system where an Indian migrant working on oil oil rig in Singapore can send money in real time at a much lower transaction fee to his bank account in India and his spouse or his family can access that anywhere in the country using the network we have so it's dramatic stuff is happening there
• 16:30 - 17:00 and a good example of the impact of this is the difference in acceptance points Merchant acceptance is where a merchant takes a particular payment system now before UPI came along the only way to do Merchant acceptance was through a post machine and it took India 60 years to get to about five six million post machines because each boss machine there's a hardware investment
• 17:00 - 17:30 you know there's a right the bank has to check it out Etc essentially UPI unbundle the QR came up with the QR code way of making payments so a merchant does not have to buy any hardware he just has to stick a QR code and you can start receiving payments and the UPI pay UPI QR code infrastructure is interoperable which means anybody can put a QR code and any consumer app can
• 17:30 - 18:00 pay at that QR code so if a merchant has a Google pay QR code you can pay at that Merchant using a phone pay app or a WhatsApp app and this interoperability and unbundling of QR codes essentially created a new class of entrepreneurs who put thousands of feet on the street to blanket the country with QR codes so India took 60 years to get to 6 million QR codes and it is
• 18:00 - 18:30 reaching 60 million 10x 6 million post machines and in three years it's getting to 60 million QR codes so you can see the dramatic step function change that this technology has done and made payments ubiquitous at merchant locations and then of course there is the digi Locker platform which is all built on top of this digilocker is an example of an Indian government Cloud where you can store all
• 18:30 - 19:00 your documents securely today 134 million Indians use the digi Locker on their phones and they use it to store their aadhaar card this or their driver's license their vehicle registration when they buy that XUV 700 or whatever and also they use it to store the vaccination certificates so when you get a vaccination certificate you can choose to keep it locally on your phone you can
• 19:00 - 19:30 choose to store it in your Digi locker and you can use it to or you can print it out and show it to somebody and not many countries have this infrastructure so fundamentally today the only thing you need in your pocket is your phone because you can use your phone to make payments with UPI and you can use Digi Locker to store your documents when the cop drives you for driving late at night you can just show your driver's license on your phone when you go to the airport you can show your ID on the phone so
• 19:30 - 20:00 everything is on the phone and this is happening at a scale of you know 100 million 200 million people so this Digi Locker makes transactions paperless and then of course as somebody who's in the moving business the automotive business we have seen how fast tag and GST has cut waiting times at interoperability rate at Borders there's enough data now to show that there is a dramatic reduction in the time that vehicles take when they pay with fast
• 20:00 - 20:30 tag as compared to the old model of fishing around in their pocket for some loose change fast tag again the system which I designed in 2010 is now used across the country and does millions of transactions and that along with GST has made a big difference so you can see the volumes here last year fast act did 2.4 billion transactions and now as you all know in the Rajesh will know that every car has to go out with the fast tag so fast tag
• 20:30 - 21:00 is there on every card and every truck which is manufactured so it's become ubiquitous as a paperless way of making payments and the other benefit of fast tag has been it has essentially cleaned up the revenue generation of Highways because you no longer in the whole model when you took cash you didn't know how much of the cash actually reached the the the you know how much cash was being siphoned off but now all payments are digital and therefore road projects have become more Finance worthy because now
• 21:00 - 21:30 you can you can predict the cash flow or because it's going to be real money coming from digital transactions and that in turn allows the government to monetize their assets sell their roads existing roads to you know pension Pension funds or whoever and then recycle that capital in building New Roads so there's a huge I'm trying to find the whole link is there you put in technology you improve efficiency make projects roadworthy monetize that create liquidity put the capital back so all
• 21:30 - 22:00 this is happening there and it has also made our government spending more efficient India cumulatively in the last 10 years has transferred 310 billion dollars into people's bank accounts and particularly during the pandemic hundreds or hundreds of millions of people got money as emergency money because of the their lost jobs that gone back to the Villages and they've been a total of about a billion transactions
• 22:00 - 22:30 since we started India started this project the other big thing is what's happening in taxation essentially India is probably among the few places where both indirect tax and direct tax is digital first so in GST every 13.7 million companies are registered they fight they pay electronically they can go to any bank and make the payment now under 10 2.0 so you can pay anywhere uh I'm sorry that's
• 22:30 - 23:00 on the income tax side on the GST side you can go to any Bank uh you you file your returns digitally GST one two three all that stuff you file your invoices digitally because you need invoices to be filed for getting tax credits All Digital and 13.7 million businesses today are doing that similarly our entire income tax system is digital 7 71.4 million taxpayers are filing income tax returns and paying digitally and what is what is happening because of this is that India's tax to GDP ratio is
• 23:00 - 23:30 going up and will go up even further so today if we have GDP growth of six seven percent inflation of seven percent nominal GDP growth of 14 15 our tax collection is going up at 30 to 40 percent in other words tax collation is two times GDP growth and even if it drops to 1.5 times GDP growth what's going to happen in the next 10 years is India's tax to GDP ratio will keep going up it's already at 11.7 percent which is
• 23:30 - 24:00 the highest in 20 years and you will government will therefore have more money to spend on public projects infrastructure you know reduce deficits and all that good stuff so you're seeing a very secular Trend where India Stacks to GDP ratio is going to go up in the next decade and then the capital markets have been transformed today anybody can apply for an IPO on their phone using the UPI asba
• 24:00 - 24:30 feature in the LIC IPO more than 50 percent of the applications came through UPI and that's this is also the reason for building the Sip Market the systemic investment plan and so millions and millions of people are using this it's growing every day and fundamentally because of the Sip which brings in billions of dollars every every year India has been protected from the rapid you know where the the thing with these
• 24:30 - 25:00 fiis is as soon as I'm interested it goes up they all vanish they all take the money and run away and India historically has been vulnerable to Capital flight but that is no longer true because a domestic domestic investors have held the held the thing going and the domestic investors have held it going because they use sips and that's a big part and sap is possible because of Nach which has a recurring mandate and now increasingly UPI which
• 25:00 - 25:30 has a or has a mandate called auto pay which allows you to set up so you know the modern principle all this stuff is all all connected and fundamentally our markets are in much better shape and all this is formalizing the economy people who are outside the system are coming into the system companies that are outside the system are coming into the system and everybody is getting used to digital technology so this is the only country in the world where anybody has built population scale
• 25:30 - 26:00 digital public infrastructure this is a chart from phone pay which lights up the consumption of digital payments across the country and as you can see it's all over the place maybe it's less in some parts of the country but fundamentally it is not just an urban phenomenon or a rich people's phenomenon it's a universal national phenomenon and this is based on the philosophy of creating public goods which are
• 26:00 - 26:30 interoperable and competitive and open and accessible anybody can compete and so on it's not about creating a wall Garden winner take all kind of thing and then of course this has been made possible by India's I.T service industry my friend gurnani is over here Duran is here so Tech Mahindra Infosys Wipro TCS India's I.T industry took 30 years to reach 100 billion
• 26:30 - 27:00 it took 10 years to go from 100 billion to 200 billion is going to go to from 200 billion to 300 billion in three years so the step change acceleration of this industry as India becomes the de facto Center of global technology development the number of people employed in the industry is about 5 million is going to double to 10 million all of them are going to buy those Vehicles you make and it's going to create a massive economic demand because every one job in the IIT
• 27:00 - 27:30 industry creates uh you know four or five jobs in other sectors and along with that so this is also a massive foreign exchange benefit for the country along with which is our inward remittance also by our human capital and as you saw today's paper so far last year India's remittance was 86 billion dollars this year is going to be a hundred billion dollars and fundamental shifts are happening in the old days it was people from Kerala
• 27:30 - 28:00 going to the Gulf in the new world it's people from up going to Finland so the whole game has changed so over the next 10 years there's going to be a dramatic increase in inverted remittance from around the world by Indians who have gone to work and the combination of Inward remittances and I.T is fundamentally allowing you to create a 500 billion dollar balance sheet on the foreign exchange front and then of course there's a whole startup ecosystem
• 28:00 - 28:30 India had 1 000 startups in 2016. last year it had 90 000 startups 90x in seven years it's crazy and massive funding happening and you're going to see a lot of activity here and of course many of them may not succeed but even if 10 percent succeed they will change the country so there's a massive startup ecosystem and they're leveraging the talent that is there in the it group they're leveraging the foreign exchange they're leveraging the digital infrastructure which we have
• 28:30 - 29:00 and now we have a Young connected country that consumes uh content digitally a great example is IPL rights you know well IPL started they were only television rights there were no digital rights and then slowly digital rights started in the last IPL auction digital rights got more money than television rights and that shows how India shifted in 10 years as a digitally consuming company and that's very obvious in 2016
• 29:00 - 29:30 not very far back guys used to huddle in some TV shop and watch cricket now they don't need to do that because they can get it on their own device there's a shift in four years there's a kind of Technology change that's happening and startups have captured the imagination of young people 2012 IIT topper said I want to be a scientist now he says I want to be Elon Musk so that's a big change in the mindset of people and also there's a startup alumni ecosystem
• 29:30 - 30:00 there are 113 startups founded by myntra alumni there are 318 startups founded by Flipkart alumni just two companies you can imagine that as this takes off more companies will beget more companies like nuclear fission and ultimately they're going to be many many more entrepreneurs in the society and of course that is having impact on incumbents you know yoga is make electric scooters for ether for hero electric because they have to
• 30:00 - 30:30 compete with ether Tata launch is new because they want to compete with Nika Jupiter and open are so-called Neo Banks so SBI and kotak so you know and you know you guys are launching electric vehicles three wheelers so fundamentally this startup energy is also making incumbents say that we need to be do better than them and therefore you're creating a you're never seen this level of innovative energy in the system that we have now so this will continue to transform India
• 30:30 - 31:00 in the what are the new areas where we will see it I talked about what happened what will happen the big three and all three have implications for you is credit e-commerce and Logistics all these three are going to get disrupted over the next decade first of all I think we are going to enter into a credit super cycle Indians have always had a huge unmet demand for credit but now Supply is increasing because of the financialization of savings so less
• 31:00 - 31:30 people are keeping their money in real estate and gold more people are keeping their money in financial services you can see that with the rise of family offices and all that good stuff now combination of digital public goods and startups is solving the three big challenges of credit whom to give it to how to make sure it's reliable and it's you know after all the main thing that it is you get your money back so how do you make sure you give it to guys who
• 31:30 - 32:00 give the money back and thirdly how do you intercept the cash flow so that you can get money in his flow so that he can't you know he cannot pay you these are fundamental issues all three are going to change and I believe that just like UPI transform payments credit is going to get transformed in the coming 10 years the volume will go up the velocity will go up the veracity that the accuracy will go up and the variety of trade will go up retail consumer this that everything will happen and I always think that will small
• 32:00 - 32:30 tickets loans are exploding and essentially information collateral which is your digital footprint will replace acid collateral so in the old days when you gave a loan said give me a balance sheet what assets do you have in the new world you look at your digital flow how many invoices you paid how much business you got digitally all that will give you the data to decide whether you're a good credit risk or not so information collateral is replacing credit
• 32:30 - 33:00 collateral and then of course the whole Logistics is being done so there's massive private sector interest in reforming the logistics chain you're looking at Last Mile three wheeler electric for delivery all that is going to be massive that is accompanied by huge investment on the public side so suddenly there's both public investment and private investment just to look at Bangalore airport Bangalore airport handles 35 million passengers a year
• 33:00 - 33:30 the new terminal Terminal 2 which got launched recently will add 20 million there's 55 million and in the next seven years they're going to add one more terminal they'll go to 80 billion 80 million a year 80 million a year is Heathrow can you imagine Bangalore will just because Heathrow in seven years so this is what is happening the kind of change which is happening is staggering so the combination of private investment Innovation and public investment is going to transform Logistics and again Logistics will go from offline informal
• 33:30 - 34:00 to online and formal and all data driven so everything will be able to track everything and the enough people I see who are doing that and that by the way is a picture generated by an AI called Dal e to show what's happening out there it's an Indian truck driver looking at his phone and then of course so dpgs GST eBay Bill fast tag all are creating a single physical Market along with the innovations that you're all driving and then the third big thing is going to be the e-commerce expansion
• 34:00 - 34:30 and here again just like I talked about digital public goods opening it up we are essentially or the thing called ondc which is going to open up e-commerce and allow everyone to participate and fundamentally e-commerce is going to be far more inclusive and it'll bring millions of small retailers into Commerce so what ondc is doing is converting all Commerce into e-commerce or so payments already digitize inventory will get
• 34:30 - 35:00 digitized so any supplier can declare his catalog on ondc and anybody can order it on that from his catalog Discovery gets digitized because I can order from any app I can use a phone pay app I can use your app and order something and Logistics will be a service so I'll get one of your companies to have it delivered to me so the unbundling of e-commerce which is again a unique Indian phenomenon will completely turn things upside down in the world of Commerce
• 35:00 - 35:30 and then today in the world of Commerce there are very strong linkages between wholesalers retailers Distributors because they give credit so as a wholesaler is as much A lender as a supplier of things and therefore the bonds are very tight but once we unbundle credit and everybody in the value chain can get access to Affordable Credit from formal systems then it no longer depends on credit to from the wholesaler and so the whole supply chain is going to get untangled in the years to come
• 35:30 - 36:00 so what we saw in the digital world was Google Plus Facebook ads stripe Amazon web services all enabled you to start a digital company because you all just had to use a credit card and you're good to go India will see credit plus ondc plus up high plus Logistics providing a full stack for selling physical products because what I can sell can be put on my ondc if anybody can order it and some Logistics guy can deliver it and I can
• 36:00 - 36:30 pay it what's left so fundamentally the way we think about products about Brands all that is going to change in the coming years so what I try to explain to you is that we have exponential change which happens but it happens gradually and then suddenly something happens and we saw that with identity I.T Services smartphones Etc but this is all a domino effect each
• 36:30 - 37:00 one is affecting the next and all this stuff is now interacting and leading to that 10 trillion 10 trillion dollar economy that we have so fundamentally India is actually creating a new model of growth which is technology LED which is collaborative which is Equitable and democratization and you're going to see some amazing stuff in the coming 10 years and you guys are going to make it happen thank you very much [Applause]
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