Boston: Preferring India over China, MasterCard’s India-born president and CEO Ajay Banga said that India is a “more exciting” market than its neighbor China when it comes to card and payment and the company has decided to focus on shifting as many consumers in India as possible from cash to electronic payment mode.
 "India still uses a lot of cash in its economy. All I am interested in is converting utilisation for retail payments from cash to alternative forms," Banga said.

India is undertaking various steps to help drive "electronification", from the unique identification number scheme to mobile payments, he said on the sidelines of the 'India Conference' organised by the Harvard Business School (HBS) and Harvard Kennedy School.

Sheer availability and acceptance of cards will help drive growth of the electronic payment system in India and "I am keen to do that," he said.

Cash is costly for an economy to print, distribute and secure, which costs between 0.6 to 1.5 per cent of the country's GDP, Banga said who was named MasterCard CEO last year.

With the availability of cash, income tax evasion and illegal cross border activities can take place on a larger level. 

"Electronic payment would not facilitate that," he said, adding that the market in India is ready for a boom in use of electronic payment systems.

He said the world over, the "tonality" regarding India has changed completely.

This is a testimony to the country's "unbelievable economic growth," he said, adding that hopefully, India's GDP growth rate will surpass that of China's in a few years.

The most interesting part of India's growth story is that the economic development has continued irrespective of which political party is in power, Banga said.

India has the opportunity to have balanced domestic and external growth as well as "diversified growth" in areas like services, agriculture and industry, Banga said lauding India's entrepreneurial energy.

He pointed out that while in the short and medium run, the services sector will create more jobs, India has to build its manufacturing capabilities for sustained economic development.

"Eventually India has to go past the services sector into developing manufacturing. There is need for the manufacturing sector to drive subsequent growth," which would require a series of reforms on capital formation, land acquisition and more infrastructure development in non-urban areas. India has to strike a balance between "knowledge intensity and labour intensity" to ensure sustained growth, he said.

"We should not go only for labour intensity, we need to use knowledge intensity for our benefit to make our economy an innovation driven one," he said.

India has the advantage of a "demographic dividend", said Banga adding sheer size of a young population will alone not result in growth for the country going forward.

He said efforts have to be made to improve the quality of life for Indian citizens, an issue which is a matter of concern and poses real challenges to the India growth story.

"Private sector needs to be willing to give a great deal more into charitable causes," he said, adding that while some people have begun giving more to charity, "there is still lots to be done."