News & Analysis

ONDC Agenda Gets a Push in Survey

The Economic Survey says India should focus on eCommerce for small businesses and do so by leveling the playing field and further expanding digital payments

The Economic Survey for 2022-23 tabled in Parliament believes that the Open Network for Digital Commerce (ONDC) is the way to broaden the market footprint for small businesses in India through enhanced customer reach. The report, tabled in the Parliament, says it would be fair to expect more fund allocation for this project in the future. 

The report says ONDC will ensure a level playing field for start-ups and new businesses, giving them access and options for an enhanced customer reach adding that it would be the next step in India’s digital infrastructure growth after UPI. In fact the Survey dwelt at length on the public goods infrastructure such as UPI, DigiLocker and CoWIN too. 

ONDC will be a game changer in digitization 

“As digitization continues across B2B and B2C, real time pricing to help offer consistent and transparent pricing for both online and offline could be a real game changer. Hence, we could expect a few announcements in this domain either in the form of schemes, incentives, or allocation of additional funds,” the Survey said. 

It also pointed out that since the eCommerce market currently was skewed towards cash-on-delivery, government would continue to boost adoption of digital payments by extending a dedicated budget for promoting digital inclusion, the establishment of digital banking units across the country, ensuring low cost digital data plans and more internet-based services. 

Account aggregation framework up and running

The Survey also noted that the account aggregator framework already has more than 110 crore bank accounts that are eligible to share data on it. Already 23 banks are part of this network with 33 lakh users having linked their accounts already. Of this number, more than 32.8 lakh users have successfully shared data via different aggregators.  

Readers would recall that the account aggregator network is a data-sharing protocol that compiles information from multiple sources and seamlessly shares it with financial institutions and service providers. From a customer perspective, this removes the need to provide personal data each time to a service provider. 

The Survey said 27 financial institutions have been onboarded data providers with 12 from the public sector, 10 from private and one small bank having already gone live on the network. Four insurance providers have also joined the network as have 119 financial institutions, who will be the users of this data. 

MSMEs would be the biggest beneficiaries

“The MSMEs have also benefited from access to digital platforms for their marketing needs and easy payments. With the Open Network for Digital Commerce (ONDC) creating opportunities for MSMEs to access ecommerce technology and diversify their target markets, this trend will likely strengthen further. Moreover, onboarding GSTN as a Financial information provider on the Account aggregator platform will open up avenues for access to credit for MSMEs,” the Economic Survey said. 

Besides ONDC and UPI, the Survey also brought up the Digital Document Execution network launched in 2020, which eliminates the need for physical presence of the person executing the documents and agreements. The aim is to deploy electronic signatures via Aadhar to verify users online so that both the execution time and costs go down considerably. Already, 23 states and Union Territories have deployed these digital e-stamping services. 

The platform aims to eliminate the need for the manual process and the physical presence of a person for executing documents and agreements. It aims to deploy electronic signatures via Aadhaar to verify users online and lower execution time and cost. 

“The rollout of 5G services can unleash new economic opportunities and help the country leapfrog the traditional barriers to development, spur innovations by startups and business enterprises, and advance the ‘Digital India’ vision,” the survey said adding that digital public goods infrastructure would continue to be a focus area for some years to come. 

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