While India’s digital push is exciting, its future rests on the quality of the supporting infrastructure framework, ace banker Deepak Parekh said. “Reports suggest that India has one of the lowest internet speeds in Asia and this gets aggravated by frequent power outages across many pockets of the country,” he noted while speaking at an event in IIT-Madras.
“It doesn’t sit well to have the world’s fastest growing internet market — estimated at 450 million users and also have one of the slowest internet connectivity speeds. So, when we think of digital future, we need to get back to the basics — that of finding better ways to fix and fund our infrastructure requirements,” Mr. Parekh, Chairman of Housing Development Finance Corporate (HDFC) said.
Another challenge is the financial health of telecom companies, which is not encouraging. Consolidation in the sector alone will not help ease the situation, he added. Mr. Parekh also said India needs to gear up for a roll-out of 5G spectrum soon which would help in future needs, while delivery of initiatives like education, healthcare, governance and smart cities, among others, hinges on better connectivity.
He also pointed to the rapid growth in digital payments with the total volume of transactions through credit and debit cards, e-wallets, mobile banking and the unified payment interface standing at 400 million, representing a volume of ₹1.9 trillion in March 2017. “Of this, mobile banking dominates, accounting for 75% in value terms. The future of digital payments runs on the premise of reducing transaction costs and faster processing,” he added.
Fintech firms
Asked about the competition to banks from fintech firms such as Paytm, he said that the two have to collaborate and complement each other. He said e-commerce companies should focus on generating revenue and profits and being sustainable, rather than burning their cash through discounts.
IIT-M launched the ‘Deepak Parekh Institute Chair’. The Institute Chair is intended to reward senior IIT-Madras Professors for exceptional performance.
The chair has been endowed by an anonymous donor who is an alumnus of IIT-Madras. Its first occupant will be Prof. T. Pradeep of the Department of Chemistry.
