Washington: India has been a leader in digitalisation over the last few years and has overcome some of the administrative bottlenecks through increased innovation, a senior International Monetary Fund (IMF) official said.
Digitalisation has taken on added importance as the world exits the COVID-19 pandemic, Anner-Marie Gulde-Wolfe, deputy director at the IMF’s Asia Pacific Department, told reporters at a news conference here on Friday.
“As is well known by now, India has been a leader in digitalisation over the last couple of years, particularly with the provision of digital infrastructure… this has increased innovation and it has overcome some of the administrative bottlenecks that there were before,” she said.
“Under Covid, there has been significant scarring in Asia and elsewhere and digitalisation promises to be one of the avenues to increase productivity of firms,” she said in response to a question.
“We do have some empirical evidence for that. Our forthcoming Regional Economic Outlook will have a chapter that looks at productivity of firms and it shows that from the Covid recession that firms that were at the forefront of digitalisation did in fact perform better. Of course, there is still a way to go. Further progress should be made by narrowing the digital divide and by increasing digital literacy,” she added.
The IMF has a programme that looks at digitalisation and how it helps governments in implementing reforms. The IMF is also increasingly providing technical assistance in that area, Gulde-Wolfe said.
She said the IMF also works very closely with India on this and the country is at the forefront of digitalisation of government services, which was also used during the pandemic for distributing benefits.
Responding to a question, Gulde-Wolfe said in the global context, India, with a growth rate of 6.1 per cent, is still a bright spot.
“But it’s absolutely true that one needs to look at what else can be done and we were talking about scarring before. So, a lot of the issues that need to be addressed are more on the structural side,” she said.
“We don’t see a lot of room for fiscal support given where we stand on the debt level,” she said.
Similarly, on the monetary policy, given the inflation situation, there has to be a tightening bias there, the IMF official said.
“But it is important to, you know, whatever can be done on the structural front to not create impediments for growth and to try and also create an expectation of continued forward movement,” she said.
“I think that is really important. But let me just come back with, you know, the gross downgrades that we have seen in other countries, I think India is still in the relatively bright spot,” Gulde-Wolfe said.
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