Tap entrepreneurs for formalisation of economy: Nandan Nilekani
Nilekani said that the country will see a whole new era of data driven lending.
IT czar Nandan Nilekani on Wednesday said "formalisation" of the economy will happen not by large companies hiring thousands of employees, but by harnessing individual entrepreneurs.
"...formalisation of Indian economy will happen, not by large companies hiring thousands of employees, but by networks, being agile and flexible, and by harnessing individual entrepreneurs and giving them access to credit, skills, markets, social security and so on," he said.
Speaking at an event organised by 4TiGO, a logistics startup supported by him, to announce the start of its operations, he said lot of people believed that "we will have large companies and employment and all that stuff. But to address the problem of employment and entrepreneurship, ways should be found to aggregate millions of small producers of different kinds into platforms".
Citing Ola, Uber, Amazon and Flipkart as examples for this, he said, "Why this is important is because, platforms enable people to move from the informal economy to formal economy...by giving them access to market, credit and social security."
Such platforms offer source of business and result in digital trail of activity between platform and the provider. The ability to combine platforms, suppliers, credit and so on is really going to be the future of how India evolves, and "we visualise this happening in every industry."
"How do the small players get aggregated? They become the part of digital foot print, which will lead to credit, credit leading to growth and the platform will also provide market- so this is how we need to think about the future. I think this is the way that we are really going to drive change in this country," he added.
Nilekani also said it was because of all these activities, India is going from data poor to data rich very quickly.
Pointing out that the whole area of credit is going to change "dramatically", Nilekani said that the country will see a whole new era of data driven lending. He said "historically credit was undeserved to small businesses and small consumers, but now the digital transparency that has come has enabled businesses and individuals to get access to credit..."
On 4TiGO he said "idea is really part of the larger sort of the narrative that we are all working on, which is how can we use the power of the modern network to transform India. Currently, 4TiGO has set up operations in Karnataka, Tamil Nadu, Andhra Pradesh, Telangana, Kerala and Goa. It plans 100 per cent coverage of the country within the next 12-18 months.