'A Crisis Is A Terrible Thing To Waste'

Former UIDAI boss and Infosys co-founder Nandan Nilekani speaks to Group Editorial Director Raj Chengappa on how India should transition to a digital economy. Excerpts:

- Raj Chengappa

How do you view the current demonetisation process as part of the method to root out black money?

It has created a great window of opportunity to accelerate the digitalisation of the economy. This event has acted as a huge impetus to this drive, and fortunately, since most of the pieces are in place, it is just a question of executing it well in the next few months. The focus of the political system and the government on digital transactions is very, very high. And once you bring that kind of focus, things automatically start happening.

Why do you see this as a turning point for the digitalisation of the economy?

We have a situation where 86 per cent of the currency notes are out of circulation, and you have to replace this entire stock. Essentially, to print new notes. So the limiting factor becomes the capacity to print. And similarly, while in theory you have the Rs 2,000 note, in practice it can’t be traded because you don’t have change for that—so the whole issue is liquidity. The choice you have at this stage, apart from working at printing at full capacity, is to put all your weight behind digital  transactions and see how by increasing the proportion of digital transactions in the economy, you bring back liquidity into the economy.

So what’s the strategy needed to accelerate digitalisation?