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Business EYE MARCH 12, 2021 | The Indian Eye 36

with economic recovery, tech & finance

giants eye the big indian market

India’s digital payments quickly gaining ground as 1.3 billion people start to embrace

online shopping and services such as online gaming and streaming

Our Bureau several measures taken by the
government and the RBI.
New Delhi Empirical estimates indi-

he growing prowess of cate that non-food credit is
India in the field of econ- sensitive to interest rate chang-
Tomy, as well as technolo- es with a lag, with industry
gy, has garnered the attention of and services sectors exhibiting
tech giants across the world. greater sensitivity.
Technology giants Face- India’s GDP grew by 0.4 per
book Inc, Amazon.com Inc and cent in the October to Decem-
Google and credit-card provid- ber quarter (Q3 FY21), mark-
ers Visa Inc and Mastercard ing a return to positive zone
Inc are among those vying for after two-quarters of recession
unprecedented access to In- but showing a lingering weak-
dia’s burgeoning digital retail ness in the economy, govern-
payments market. The compa- ment data showed on Friday.
nies are part of four consortia Indians are starting to embrace online shopping and other services A sharp improvement in the
preparing to apply for licenses Covid-19 situation and rising
in India to operate retail pay- in 2016 and set the digital pay- Meanwhile, economic activ- public spending are the two fac-
ments and settlement systems. ments arena afire by allowing ity is gaining steam in India as tors behind uptick. “The GDP
One of the consortia con- users to link their phone num- Covid-19 incidences recede but at constant (2011-12) prices in
sists of Amazon, Visa, Indian bers to their bank accounts. private investments are missing Q3 of 2020-21 is estimated at
retail banks ICICI Bank Ltd This made transferring and re- in action, according to the Re- Rs 36.22 lakh crore as against
and Axis Bank Ltd as well as ceiving money via apps as easy serve Bank of India (RBI). “All Rs 36.08 lakh crore in Q3 of
fintech startups Pine Labs and as sending a text message, al- engines of aggregate demand 2019-20, showing a growth of
BillDesk. Another group is led lowing large scale and high vol- are starting to fire. Only private 0.4 per cent,” said the National
by billionaire Mukesh Amba- umes of transactions to happen investment is missing in action Statistical Office (NSO).
ni’s Reliance Industries Ltd at a minimal cost. and the time is apposite for it to A continuing fall in domes-
and its partners Facebook and India’s digital payments come alive,” it said in a month- tic consumption is seen as a
Alphabet Inc’s Google, which are quickly gaining ground as ly bulletin. The ongoing vaccine strong reason behind the slug-
together agreed to invest more India’s 1.3 billion people are rollout is releasing pent-up op- gish pace.
than USD 10 billion in Reli- starting to embrace online timism, said the central bank. According to second ad-
ance’s digital services unit last shopping and services such as Broader measures of liquidity vance estimates of economic
year. online gaming and streaming. reflect the easing of monetary growth, the real GDP in cur-
The contest is fierce as reg- India’s smartphone user base and financial conditions in the rent financial year (2020-21) is
ulator Reserve Bank of India is approaching one billion and system. estimated at negative 8 per cent
is expected to give just one or Credit Suisse Group AG pre- Bank credit growth, which as compared to growth rate of
two licenses, as implied in its dicted USD 1 trillion in online witnessed a slowdown in 2019- 4 per cent in 2019-20. Agricul-
notification inviting bids. The payments in the country in 20, experienced a further set- ture sector is estimated to see
process to decide the winners 2023. back in 2020-21 in the wake of a growth of 3 per cent in FY21
could take at least six months The companies chosen to Covid-19-induced lockdown. as compared to 4.3 per cent
and it could be a further year enable such transactions stand But with the gradual re- in 2019-20. The manufactur-
or more before the systems and to reap lucrative commissions. sumption of economic activity, ing sector is likely to contract
solutions come into use. The The new licensees could credit to agriculture and ser- by 8.4 per cent during FY21.
winners will take on the Na- make money by charging busi- vices sectors has registered ac- More worryingly, services sec-
tional Payments Corporation nesses transaction fees. They celerated growth in the recent tors like trade, hotel, transport
of India, the sole pioneering can also break new territory period, said the RBI. are projected to contract by 18
umbrella organisation backed by setting up and operating Even in the industrial sec- per cent.
by more than 50 retail banks. ATMs, point-of-sale systems, tor, credit growth to medium However, electricity is likely
Its Unified Payments Inter- remittance services and new in- industries has accelerated in- to grow at 1.8 per cent. Not a
face, or UPI, protocol debuted novative payment solutions. dicating the positive impact of good sign.

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