The ‘1+1+1’ billion vision

Seeing the Moody’s upgrade, preceded by a 30-spot jump in ‘ease of business’ rankings, as an endorsement of major initiatives like demonetisation, GST and Aadhaar, the government is set to pursue a unique and ambitious ‘1 billion-1 billion-1 billion’ connectivity vision.

This means one billion unique Aadhaar numbers, linked to one billion bank accounts and one billion mobiles. The target follows the success of demonetisation in bringing about a substantial Rs 6-lakh crore reduction in the value of high-value notes that would have been in circulation and a rising trend of bank accounts and digital payments.

There is confidence in government circles that the “1 plus 1 plus 1” figure will happen soon — though no target dates are spelt out — and this will mark a big step towards expanding the financial and digital mainstream.

According to official statistics, estimated high-value notes at the end of September 2017 add up to approximately Rs.12 lakh crore as against a value of Rs.15.44 crore in November 2016 when PM Narendra Modi announced demonetisation.

The rate at which specified bank notes were growing meant they would have been of the order of around Rs.18 lakh crore and they have been effectively brought down by Rs.6 lakh crore.

The Modi government finds positive references to politically contested measures like demonetisation, GST and Aadhaar particularly gratifying as it has waged a bitter battle over these programmes with its policy critics and the opposition. The improved rating, which was shared with the government a day before release, sees these steps as serious attempts to formalise the economy and make it more transparent.

The fillip to digitalisation, read in conjunction with Aadhaar and measures like BHIM-UPI, is also being recognised by ratings agencies, and the reduced transaction costs are also making a difference.

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