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Digitization: A Catalyst for India’s Economic Expansion

India’s digital revolution is set to be powerful catalyst for economic expansion. It could potentially disrupt incumbents and reshape the business landscape at a faster pace than any other force in modern day India.

At the core of India’s digital revolution are three forces which are often referred to as the JAM Trinity: Jan Dhan Yojana, Aadhaar, and Mobile Penetration.

Incidentally, the revolution started with the implementation of Aadhaar in 2009, a project aimed at providing each citizen with a biometric identity, a unique 12-digit number that can be verified by fingerprint. It is estimated that 1.1 billion Indian citizens currently have biometric identities.

The biometric identities are linked to individual bank accounts, facilitating greater use of digital transactions.    

Then in 2015, the government launched Digital India, with the aim of increasing connectivity through mobile and high speed internet networks. The project focused on three key areas – digital infrastructure as a utility to every citizen, E-governance and services on demand, and digital empowerment of citizens.

The third element of the JAM Trinity, Jan Dhan Yojana, is driven by government policy to promote greater financial inclusion by encouraging citizens to open bank accounts. It is estimated that most Indian households now have bank accounts.

Effectively, the JAM Trinity set the stage for rapid digitization, with the potential to benefit several sectors, among them consumer discretionary, financials, telecommunication services and information technology, which are poised to experience potentially strong growth.

For example, the financial sector is expected to benefit from the shift to a cashless society, greater use of credit cards, and the increasing ability of financial institutions to issue loans and other forms of credit.

Since bank accounts are already linked to the digital identities of account holders, more transactions are being conducted electronically.

The digital revolution is also facilitating greater use of credit cards for on-line commerce, benefitting the consumer discretionary sector. For instance, point of sale terminals of merchants are now equipped with finger scanners linked to the Aadhaar database. Therefore, citizens can conduct financial transactions using their digital identity, bank accounts and /or credit cards.

Incidentally, India’s young demographics are a boost to digital banking. They are more likely to use mobile phones and smartphones to conduct digital transactions.  

The expansion of high speed broadband networks has led to a proliferation of the internet in both rural and urban communities, opening up tremendous opportunities for manufacturers and service providers to leverage their on-line connectivity to cater to their rapidly evolving needs; and to offer more targeted and cost-effective solutions.


With the on-line revolution gaining a stranglehold on the population at large, Indians are using the internet for everything ranging from e-commerce, social media, conducting financial transactions, e-mails, searches, entertainment, travel, education, jobs, and to communicate through a variety of different forums.


As well, given the growth of mobile devices and broadband connectivity, the telecom industry is set for expansion as digitization grows.  And so is the broadcasting industry which has a mandate to provide cable services to all Indian households, including those in rural areas.


Evidently, India’s digital revolution is set to have an even greater impact as it penetrates the fabric of society and businesses, benefitting businesses that are inter-connected.  


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Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.