RBI Report: Poor States Display Higher Levels Of “Digital Awareness”

By: Sutanu Guru

India has one of the highest mobile data consumptions in the world, with an average per-user per-month consumption of 24.1 GB in 2023.

The Annual 2023-24 Reserve Bank of India Report on Currency & Finance released on July 29 contains an incredible wealth of data on the ongoing digital revolution in India. One of the more interesting revaluations is that Digital Awareness (proportion of citizens aware of and familiar with digital payments, fin tech, UPI and biometrics seems higher in poorer and low per capita income states compared to their more prosperous counterparts. Before getting into details on that trend, it is worthwhile getting a ringside view of the spectacular and fundamentally transformational digital revolution being witnessed in India as narrated by the RBI Report: “Although internet penetration in India was at 55 per cent in 2023, the internet user base has grown by 199 million in the recent three years (IAMAI-Kantar, 2024). India’s cost per gigabyte (GB) of data consumed is the lowest globally at an average of ₹13.32 (US$ 0.16) per GB (Cable.co.uk, 2024). India also has one of the highest mobile data consumptions in the world, with an average per-user per-month consumption of 24.1 GB in 2023 (GSMA, 2024; Nokia, 2024). There are about 750 million smartphone users, which is expected to reach about one billion by 2026. India is expected to be the second largest smartphone manufacturer in the next five years (Deloitte, 2022). India has the world’s third largest startup ecosystem with over 1.4 lakh startups and over 100 unicorns (DPIIT, 2024; Tracxn, 2024a). The heavily tech-based startup ecosystem includes various sectors like FinTech platforms, viz., insurance and payments, gaming, software as a service (SaaS)-based tools, logistics, healthcare services, education technology, e-commerce and online markets.”  

While the cream of the activity related to the digital revolution is confined to clusters in large metropolis, usage growth and depth of digital instruments has spread across India, including remote rural areas. There have been numerous anecdotal tales from global tourists, analysts and commentators about how they have successfully paid for a cup of tea in a remote village using the UPI. That is clear indication that an overwhelming majority of Indians are now familiar with digital instruments and transactions. But the interesting data emerging from this Report is about differences between various states when it comes to Digital Awareness. One would normally expect citizens of poor and low per capita income to be less aware of digital instruments, transactions and their benefits. 

Yet, as the accompanying chart indicates, that hypothesis could be wrong. As per the RBI Report, Jharkhand, Chhattisgarh with a shade over 60% of the population being Digitally Aware is an outlier. Otherwise, almost all other states that are poor and have per capita incomes lower than the national average show very high levels of Digital Awareness. Take the example of Bihar and Gujarat. The per capita income of Gujarat is more than five times that of Bihar. Yet, Digital Awareness in Bihar is at 84% compared to 75% in Gujarat.  

What could this possibly mean? Perhaps all states have the potential to reap the benefits of the incredible digital revolution. But lack of infrastructure, poor governance and the absence of an investor friendly environment has kept some Indian states in continuing poverty while others are moving ahead.