Digitisation a game changer; India can certainly be $10 trillion economy: IMF chief economist
IMF Chief Economist Pierre-Olivier Gourinchas termed digitisation as potentially a game changer that allows for policy to be more nimble and have less of an impact on the overall fiscal stance.
The International Monetary Fund has endorsed the Narendra Modi government's digitisation efforts and termed them as a game-changer that permitted the administration to execute plans that would have otherwise been extremely difficult.
IMF Chief Economist Pierre-Olivier Gourinchas told news agency PTI, 'Digitization has allowed the Indian government to do things that would have been extremely difficult to do otherwise. Yes, it is a game-changer. It is certainly something that is a very welcome development.'
'Digitisation helps in financial inclusion as a lot of people in countries like India are unbanked. Having access to digital wallets is a way in which they can do away with transactions involving cash, which are very inefficient,' he said.
Terming the effort to bring people into a more modern economy a massive advantage, Gourinchas said plugging into 'this digital instrument' can be a factor for growth.
'These digital instruments also allow governments to reach and disburse systems in ways that are much harder to do sometimes with regular pipes of the safety net,' he said, adding, 'One of the lessons we have learned from both the pandemic and the energy crisis, is how can assistance can be provided where it is needed. Because it's enormously costly to have a blanket policy that is going to cover everyone.'
Asserting that digitisation enables the promise of more targeted assistance when needed, Gourinchas termed it as potentially a game changer that allows for policy to be more nimble and have less of an impact on the overall fiscal stance.
More insurance, more protection can be provided, he said.
'10 Trillion Dollar Economy? Achievable!'
When asked if he believed that India could achieve the ambitious goal of a $10 trillion economy, Gourinchas said it was certainly achievable.
'We have seen a number of nations grow at very fast rates in the past and really develop very rapidly. So, I think it is certainly -- it is not necessarily an easy task -- but yes, there is certainly an enormous potential for an economy like India. To do so, India needs to carry out a number of structural reforms,' the IMF Chief Economist said.
At the same time, Gourinchas said India has already introduced a number of reforms in this direction. Citing the example of digitisation, he said the manner in which digital tools are deployed to improve financial inclusion or to facilitate access to administrative services is a testimony to the sort of innovation in that sector that is happening in India.
With PTI inputs