Understanding Financial Technology, Cashless India & Forced Digitalisation
YWCA, Ashoka Road, New Delhi
January 24, 2017, 930 am
9.30 am – Registration
Introduction to the Seminar & Setting the Context
National Alliance of People’s Movements
10.15 – 11.30 am
Understanding the Political Context of FinTech
B P Mathur
Former Dy CAG
Free Software Movement of India and Knowledge Commons.
C P Chandrasekhar,
Centre for Economic Studies and Planning, JNU
11.30 – 11.45 – Tea / Coffee break
11.45 – 1.15 pm
How will FinTech Impact the Poor, and Labour and Banking Sector?
New Trade Union of India
Mazdoor Kisan Shakti Sangathan
General Secretary, State Bank of India Officers Association
1.15 – 2 pm – Lunch
2 – 3.30 pm
Understanding the Economic Context of Fintech
Former Director, RBI
3.30 – 5 pm
Understanding the Architecture of FinTech: Linkages to Aadhaar, IndiaStack etc
Centre for Internet and Society
5 pm – Tea
On November 8th, when 86% of the currency was demonetized, that perhaps caused one of the biggest ever financial disruption in the country. It was purportedly aimed to counter the black money menace, terror and drug financing, money laundering and reboot the investment climate and free up the locked cash for a fresh round of investments. The whole move has been questioned and faced criticism from numerous quarters. It would be still too early to grasp the long-term impact of this.
As the time lapsed, the government has been exposed for its complete lack of preparedness, and the way number of notifications and rectification were issued over the 50 days period, which the Prime Minister said will be required to stabilize the situation.
The government on its own part have constantly shifted the goal post and tried to weave a different narrative from its initial pronouncements on the demonetization drive. At one point it was termed as the requisite step towards a cashless economy and society, an essential for weeding out corruption and black money, and also a step towards setting up a modern digital India. All these continue to be widely debated and everyday we are witnessing newer facts in public domain and as the Parliamentary committees dig deeper, more things are coming out in the public domain, raising questions of institutional and national sovereignty, economic integrity, democratic principles, corporate nexus and even about its link with the MNCs. These questions will have a significant impact on the future of the country.
Even as the situation has turned worse and studies are pointing towards decline in sale of motor vehicles, decline in manufacturing and businesses for the small and medium industries and enterprise, significant job losses in the urban centers and a reverse migration leading to rise in demand for the NREGA, one thing remains clear that big corporations and specifically, finance technology (FinTech) companies, have got a massive boost to their operations, businesses and profit. With that, the digital divide took a further leap, since it directly impacted once existence in the economy, in absence of hard cash and the inability of a massive section of the population to negotiate the digital world of internet banking, cards payment, IMPS, NEFT transactions and so on.
The populace, which was still getting familiar with “ATM Karo” had to learn “PayTM Karo”. However, as we dig deeper into this shift from cash to cashless, we realize beneath it the big world of the FinTech which is dominated by the technology and internet companies which are innovating and competing with the traditional financial institutions and big banks are facing the heat, e.g. Entry of m-pesa, PayTM Banks, Airtel money, Jio money and so on. These are payment banks and companies whose primary business is communications and the internet. Beyond the development of the payment banks in the world of finance is the growing influence of BitCoin / Blockchain, PayPal, peer to peer lending (P2P), and so on. These are promising to change the financial architecture and global economy.
These developments can be dubbed as part of the evolutionary process of the human civilisation, but this is certainly not delinked from the social and political context and has to be seen as such and need to be understood by many. Some of the questions, which come to our mind, are the following:
- In an integrated world economy, dominated and controlled by a tiny minority, with elected governments choosing to be the regulators, are these developments going to further establish the monopoly and dominance of the existing elite? What impact will this have on the emerging and developing economies and for the vast majority of the population, which is still trying to be part of the industrialised society?
- The advent of the technology giants like Google, Facebook, Amazon, Uber, Ola, Alibaba etc. have thrown up a number of challenges for the decentralized work force, trade, smaller businesses, Labour practices, laws, regulations etc and is forcing the ways of the State and traditional politics in a very significant way, something which we are yet to comprehend fully. They claim to change the way we shop, the way we travel, the way we enjoy, express our love and so on. It’s claiming a fundamental shift in the consumer culture, but what impact does it have for the millions of the poor, small and marginal farmers. All of this is backed by the finance and technology, FinTech for short.
- The FinTech is now increasingly getting employed to restructure our tax and revenue collection, distribution, investments, trading etc. and also in the realms of service delivery and welfare measures, including disbursements of the entitlements. All this is being done on the back of the increasing base of Aadhaar, dubbed as illegal by the court and parliamentary committees, but pushed and promoted by the government nevertheless. The Aadhaar project has been debated and discussed for long and is mired in litigation, but it is headed towards being a fait accompli. The Aadhaar’s foundation is being laid on the back of something called, IndiaStack, developed, ‘voluntarily’ by a private corporation for use of the government. How do we understand this development and what is the web being developed by the technology giants of this country, which is now looking at the big data, big population, big market and big profit?
- The advent of these technologies and their deployment and close integration with the governance structures, means lesser and lesser control over those by the democratically governed institutions, as we have witnessed in the case of app based taxi services or online retail companies who have often used the loopholes in the law and also constantly challenged the government’s attempt at controlling them. How do we see this and how do we deal with the emerging situation?
There are a number of related questions and concerns as the situation is emerging. However, the irony of the situation is that very few of us within the activist and researcher community fully comprehend it. It is in this context that we call you for a day long meeting to look at some of these questions and help each other understand how is this emerging and going to raise fundamental questions on accountability, democracy and impinge on the rights and freedom. Since, these use the language of the freedom and individual choice to promote a unitary vision of the world, in the process killing the diversity and visions of plurality. What we are witnessing is the next phase of the capitalism taking off from the world of Walmart, McDonald and Coca Cola.
Are we prepared to deal with this emerging web of corporations? And more importantly, have we even begun to understand this? We all know what happens when “corporations rule the world”, but these corporations are very different from traditional giants like Ford and so on, much visible and in the face. In contrast, these are ephemeral and ethereal, and without human interface. These are evolving fast and is about to move to another level altogether of the artificial intelligence and automated cars and homes and smart cities, run by super computers and robots.
Hope you will be able to join us for this important meeting.
~ Centre for Financial Accountability