Digitization a game changer for Indian Economy, says IMF Chief Economist

13 Oct 2022 , 12:02 PM

The International Monetary Fund’s (IMF) chief economist praised India’s efforts to digitize, calling the initiative a game-changer that gave the Indian government access to resources that would have previously been impossible.

“Digitalization is beneficial in a variety of ways. One is financial inclusion, which is clear given a large number of unbanked individuals in nations like India. And having access to digital wallets gives them a chance to engage in transactions that aren’t only cash transactions, which are highly inefficient, Pierre-Olivier Gourinchas, the IMF’s chief economist, said in an interview with PTI in answer to a query regarding India’s efforts to go digital.

“So that’s a big plus for integrating individuals into a more advanced economy. That’s a factor for growth, he continued, adding that if you connect to this digital instrument, your market will change significantly.

He continued, “The second one, which I think has also been essential in the case of India, is that these digital instruments also allow governments to reach and distribute systems in ways that are sometimes tougher to do with some of the conventional pipes of the safety net.

“How can we deliver the support where it is needed? is one of the lessons we have learnt from both the pandemic and the energy crisis. Because it would be quite expensive to have a single, all-inclusive policy, “added he.

Both the majority of people and corporations might not require this. However, he said, there are occasions when doing things that way is the only option.

“The promise of digitization is more focused support when it is required. That has the potential to transform everything because it allows for a more flexible policy. On the overall fiscal situation, it might not have as much of an effect. Therefore, more security and insurance can be offered, “added Gourinchas.

“That is also a crucial element in sustaining the economy and aiding in its eventual recovery. There will be shocks from all different sorts of events, and it provides the opportunity for something that is much nimbler and more focused “In answer to a query, he stated.

For feedback and suggestions, write to us at [e-mail]