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Digital India: UN Report Says India Used Technology to Promote 'Inclusive Development'

Representative image of the rise of digital technology usage in India. (Photo: Telenor)

Representative image of the rise of digital technology usage in India. (Photo: Telenor)

According to the UN report, technologies like Aadhaar identification have helped India reduce inequality in areas like digital finance.

  • PTI
  • Last Updated: January 29, 2020, 3:00 PM IST
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India successfully managed to use digital platforms to reduce disparities among population groups, a flagship UN study has said, noting that the country's experience of complementing mobile technologies with the Aadhaar identification system to reduce inequality is likely to be replicated in other countries in future. The World Social Report 2020, published by the UN Department of Economic and Social Affairs (DESA), notes how India harnessed the potential of digital technologies for more inclusive development. In the report, the UN said the experience of India suggests that mobile digital technologies need to be complemented by other technologies to reduce inequality in access to financial services.

India managed to achieve more equal access to financial accounts by complementing mobile technologies with a national system of digital IDs and an affordable electricity system that provides an uninterrupted supply of stable current, it said. Given that many developing countries currently have digital ID systems and some countries are on track to achieve universal access to modern energy during the 2020s, the report said the experience of India is likely to be replicated in other countries in the near future. The report highlighted the role played by the Aadhaar identification system to achieve financial inclusion in India.

India has successfully managed to use digital technologies to reduce disparities among population groups. A combination of new public infrastructure and government action was behind the success of a new identification system that is increasing ownership of financial accounts and making public services more effective, it said. The report, released last week, added that in 2014, the Indian Government instructed banks to provide accounts to people not having one, using their Aadhaar numbers or other sources of information about their identities and addresses. It noted that the number of people without bank accounts declined by more than half, from 557 million in 2011 to 233 million in 2015.

By 2017, 80 per cent of adult Indians had at least one bank account, which is significantly higher than the average share in developing countries (63 per cent). The biometric ID helped reduce gender- income- and education-based gaps in access. In fact, the system has also been used to enhance the effectiveness of social protection, health and voting programmes. The UN report further said that before the introduction of Aadhaar unique IDs, the less advantaged segments of the population were unlikely to have an official registered ID, which was necessary to open a bank account.

Improvements in electricity access have facilitated the opening of financial accounts and their use. Electrification has reached 82 per cent of the country's population, and the International Energy Agency predicts that India will achieve universal access in the early 2020s. The report, however, noted that despite this success, 48 per cent of bank accounts in India were reported as inactive in 2018, suggesting that the government programme to promote account ownership, launched in 2014, is still in its infancy." However, more accounts are expected to become active as a greater number of people acquire mobile phones.Two-thirds of inactive account holders now have mobile phones, and this share is increasing, it said.

The report also noted that inequality is growing for more than 70 per cent of the global population, exacerbating the risks of divisions and hampering economic and social development. But the rise is far from inevitable and can be tackled at a national and international level. It said between 1990 and 2016, income inequality as measured by the Gini coefficient increased in 49 out of 119 countries for which data are available and declined in 58 of them. Inequality has grown in the world's most populous countries China and India in particular. Overall, countries where inequality has grown are home to more than two thirds (71 per cent) of the world population.

The challenges are underscored by UN chief Antonio Guterres in the report's foreword, in which he states that the world is confronting the harsh realities of a deeply unequal global landscape, in which economic woes, inequalities and job insecurity have led to mass protests in both developed and developing countries. Income disparities and a lack of opportunities, he said, are creating a vicious cycle of inequality, frustration and discontent across generations. The study shows that the richest one per cent of the population are the big winners in the changing global economy, increasing their share of income between 1990 and 2015, while at the other end of the scale, the bottom 40 per cent earned less than a quarter of income in all countries surveyed.

One of the consequences of inequality within societies, notes the report, is slower economic growth. In unequal societies, with wide disparities in areas such as healthcare and education, people are more likely to remain trapped in poverty, across several generations. The report said that reducing inequality should play a central role in policy-making. This means ensuring that the potential of new technology is used to reduce poverty and create jobs; that vulnerable people grow more resilient to the effects of climate change; cities are more inclusive; and migration takes place in a safe, orderly and regular manner.

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