bigger cities .
Achieving inclusive growth is a vital pillar to achieve Sustainable Development Goals of the United Nations . To achieve this , digitisation has been proven to have had a multiplier impact on inclusive growth in China as its e-commerce market has become the largest in the world within a span of just 10 years , moving millions out of poverty . To further this model , it needs collective collaboration with best research minds globally to work together and evolve paradigms that will optimise the power of digitisation in order to bridge income and opportunity inequalities .
The data coming out of the Chinese model offers great insights into how India can integrate open e-commerce platforms with mobile payments and digitally based financial services “ in order to support SMEs access larger potential markets than the gravity
model for trade in the physical world .” Why this model is best adaptable in India is because the platform-centered ecosystem has low entry barriers for capital requirements and also because education and digital skill requirements are minimal , which is a perfect fit to India ’ s rural demographics , where people with low literacy levels can be gainfully employed .
China , too , was earlier a highcash economy until the mobile payment revolution happened . Before the advent of digitisation , in the pre-digital commerce era , only proximity to a welldeveloped commercial area afforded residents access to an array of physical marketplaces and consumer products . Now through Alibaba ’ s Taobao and Tmall e-platforms , the average shopping distance on these platforms is close to 1,000 kilometres , compared with a few kilometers in traditional retail markets . And in less developed regions , people are buying a wider variety of consumer goods online , offsetting the disadvantages of their local markets . This has enabled 10 million SMEs and start-ups in remotest of villages to start businesses from home and work on flexi-timings , shrinking urban-rural income disparities .
As China leads the world in mobile payments and online money transfers with 1.25 billion internet users , digital footprints , Artificial Intelligence ( AI ) and algorithms are helping in riskassessment in real time . “ So now , Chinese startups have access to credit without collateral via the innovative ‘ 310 ’ credit model : 3 minutes to apply for a loan , 1 second to get it approved , with 0 manual interference ,” signifying speed , precision and efficiency .
( Multiple references have been made from the Digital Technology and Inclusive Growth Report of the Louhan Report 2019 . The writer is an author , columnist and chairperson for the National Committee for Financial Inclusion at Niti Aayog )
www . legacyindia . in June 2019 | Legacy India 19