Uttar Pradesh (UP), India’s most populous state, has recently witnessed a remarkable surge in digital transactions, marking a significant shift towards a cashless economy. The growth in digital transactions in UP has been exponential, almost tripling within a year and growing sixfold over five years. This surge has positioned UP as the fourth-ranked state in the country in terms of per capita digital transactions.
Digital Transactions Soar
According to data from the State Level Bankers Committee, UP experienced a notable surge in digital transactions, with the numbers reaching 426.68 crore in the previous year. In the current year, this figure skyrocketed to an impressive 1174.32 crores. This remarkable increase, even surpassing the growth observed during the challenging period of the COVID-19 pandemic, can be attributed to various factors.
Key Drivers of Growth
The surge in digital transactions in UP can be attributed to several factors that have facilitated the widespread adoption of digital banking. Easy access to digital banking services, improved internet connectivity in rural areas, increased financial awareness, and a sufficient number of transaction devices have played pivotal roles in this growth.
The State Level Bankers Committee has been actively promoting cashless transactions post-COVID-19, with a specific focus on Aadhaar and Rupay card-based deposits and payments. Banks across all districts of the state have launched campaigns to educate and encourage customers to utilize mobile banking, UPI, BHIM app, internet banking, and debit cards for their transactions.
Key Drivers of Growth
Recognizing the need to bridge the digital divide, a special campaign was launched in eight digitally backward districts of UP, namely Bahraich, Balrampur, Chandauli, Chitrakoot, Fatehpur, Shravasti, Siddharthnagar, and Sonbhadra. The results were particularly encouraging, with Fatehpur, Chitrakoot, and Sonbhadra achieving success rates twice the set targets on average.
Digitization is happening in this way
| Year | Digital Transactions (in Crore) | Growth Rate |
|---|---|---|
| 2018-19 | 161.69 | 31.63% |
| 2019-20 | 189.07 | 16.93% |
| 2020-21 | 391.02 | 106.81% |
| 2021-22 | 426.68 | 9.11% |
| 2023 | 1174.32 | 175% |
Uttar Pradesh has secured the fourth position in per capita digital transactions, surpassing states like Karnataka. Even when combined, Rajasthan and Madhya Pradesh fall behind Uttar Pradesh in this regard.
| State | Per Capita Digital Transactions |
|---|---|
| Andhra Pradesh | 17.68 |
| Haryana | 12.42 |
| Delhi | 09.31 |
| Uttar Pradesh | 07.73 |
| Maharashtra | 06.94 |
| Karnataka | 06.53 |
| Rajasthan | 02.30 |
| Madhya Pradesh | 02.10 |
The data showcases the impressive growth trajectory of digital transactions in Uttar Pradesh, with a noteworthy increase of 175% in 2023 alone. As the state continues to embrace digitalization, it not only outpaces its previous records but also emerges as a frontrunner in per capita digital transactions compared to several other states in India.
Cash Transactions Alongside Digital Growth
“Interestingly, alongside the surge in digital transactions, cash transactions in UP have also increased. Contrary to the expectations post-demonetization, the currency in circulation has doubled. According to the Reserve Bank of India (RBI), the market has a cash flow of approximately Rs 33 lakh crore as of September this year. Out of this, Rs 25.81 lakh crore is in Rs 500 notes alone, indicating a sustained demand for physical currency”.
Uttar Pradesh’s rapid adoption of digital transactions reflects a significant shift in the economic landscape of the state. The collaborative efforts of banks, government initiatives, and increased financial literacy have collectively contributed to this surge. As UP continues to embrace digital financial services, it is poised to play a crucial role in India’s journey toward a more inclusive and technology-driven economy.
