“Report on Currency and Finance 2023-24” released by the Reserve Bank of India (RBI)

Current Context: “Report on Currency and Finance 2023-24” released by the Reserve Bank of India (RBI). This comprehensive report provides insights into India’s economic performance, financial sectors, and policy measures.

• Here are some key highlights from the report:
• Digital Economy Growth: Over the last decade, the global digital economy has grown 2.5 times faster than the physical economy, now constituting 15% of the global GDP. In India, the digital economy currently contributes 10% to GDP and is expected to reach 20% by 2026.
• Factors Driving Growth: India’s digital revolution is fueled by factors such as widespread internet penetration, low data costs, high mobile data consumption, and a thriving startup ecosystem. Globally, India leads in biometric-based identification (Aadhaar) and real-time payment volume.
• Digital Public Infrastructure (DPI): India’s DPI, including initiatives like the Modular Open Source Identity Platform (MOSIP), is going global. Interlinking the Unified Payments Interface (UPI) with other nations’ fast payment systems (e.g., Singapore’s PayNow) enhances financial connectivity.
• Social Welfare: Leveraging DPI, India has lifted 415 million people out of poverty between 2005 and 2021 through Direct Benefit Transfer programs.
• Challenges: Despite progress, challenges remain. These include consumer vulnerability (47% of RBI ombudsman complaints related to digital payments), cybersecurity risks (average cost of data breaches increased by 28% since 2020), and the use of dark patterns in digital interfaces.
• Recommendations: The report suggests promoting self-regulatory organizations (SROs) in the FinTech industry, scaling up cyber infrastructure, and implementing data localization measures.

Question:

1 What percentage of global GDP is currently constituted by the digital economy?

• A) 10%
• B) 15%
• C) 20%
• D) 25%

Answer: B) Over the last decade, the global digital economy has grown 2.5 times faster than the physical economy, now constituting 15% of the global GDP. In India, the digital economy currently contributes 10% to GDP and is expected to reach 20% by 2026.