There is increasing evidence from countries such as Pakistan, Brazil, Columbia, Mexico and South Africa that the government-to-person payments offered through digital and branchless banking channels could be a stepping stone to financial inclusion. The Government of India and the Reserve Bank of India have adopted a similar path to financial inclusion in India. While the target beneficiaries and the channels used under social benefit schemes and subsidy programmes and FIP are the same, financial inclusion is not being achieved as the efforts of the stakeholders driving these are not aligned. This Note analyses the demand as well as supply side impediments to realising the potential of G2P payments to further the cause of financial inclusion in India.

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