On Wednesday, the chief economist of the International Monetary Fund (IMF) said the move was a game changer as it had allowed the Indian government to do things that would have been very difficult otherwise.
"Digitization is driving down a variety of factors, one is financial inclusion, obviously because there are a lot of people in countries like India that were unbanked. And having access to digital wallets is a way in which they can start activities that are not just cash transactions, which are very inefficient," said Pierre-Olivier Gourinchas, the head economist at the International Financial Report (IMF), in a comment.
"I believe it (digitisation) has allowed the (Indian) government to do things that would have been extremely difficult to do otherwise. Yes (it is a game changer), but it is certainly something that is a very positive development, according to Gourinchas.
So that''s a huge benefit for bringing people into a more modern economy. He said that growth is a factor for growth, adding that your market becomes quite different if you are connected to this digital instrument.
The second one that I believe has been significant in India is that these digital devices enable governments to reach and repay systems in ways that are much easier to accomplish sometimes with some of the regular pipes of the safety net.
One of the lessons we''ve learned from both the epidemic and we''re learning it again with the energy crisis is how can we provide the assistance where it''s needed. Because it''s extremely expensive to have a comprehensive policy that will cover everyone, according to the author.
Most people do not necessarily need this, and some businesses may not. But sometimes it must be done that way, according to the author.
When it''s needed, digitization offers the promise of increased targeted assistance. That is potentially a game changer because now policy can be more nimble. It may also have a negative impact on the whole fiscal structure. So, more protection, more insurance may be provided, according to Gourinchas.
In response to a question, the fact that it is also a very important factor for supporting the economy and sustaining it to grow when done. There will be shocks of all kinds of events happening, and it offers the possibility for something that is more agile and targeted.