IMF execs pile praise on India’s digitization, economic growth fuelled by Aadhaar

Keen to usher in an era of government-controlled digital currencies backed by digital ID schemes, the International Monetary Fund (IMF) has praised India’s controversial biometric digital identity scheme ahead of it taking up presidency of the G20 in 2023.

Speaking at the Annual Meetings of the IMF and World Bank Group, currently underway in Washington D.C., IMF Director Kristalina Georgieva praised the “digital access” that the digital ID, Aadhaar, brings to services, when asked about her expectations of India’s G20 presidency, shows the IMF transcript of her press briefing.

“India deserves to be called a bright spot on this otherwise darkening horizon because it has been a fast-growing economy even during these difficult times,” responded Georgieva, “But most importantly this growth is underpinned by structural reforms, among them the remarkable success in digitalization in India from digital ID to providing all services and support on the basis of digital access.”

From its “position of strength” in digital transformations, India could leave a mark “in the area of digitalization, including digital money. We know that we need regulation of crypto. We know that we need to get some more attention to cross border payments and how we are proposing public investment in the infrastructure of a cross border payment platform.”

“From India there is a lot to learn,” said Paolo Mauro, deputy director, Fiscal Affairs Department at the Fiscal Monitor Press Briefing, referring to its cash transfer scheme.

“It is a logical marvel how these programs that seek to help people who are at low‑income levels reach literally hundreds of millions of people,” said Mauro in response to a question on India’s cash transfers.

“There are programs that target specifically women. There are programs that target the elderly, farmers. Perhaps the interesting part is that in these examples, there is a lot of technological innovation.

“In the case of India, one thing that is striking is the use of the unique identification system, the Aadhaar. But in other countries, also, there is greater use of sending money through mobile banking to people who actually do not have a whole lot of money, but they have a cell phone.”

The IMF is working on a “very ambitious program of application of new technologies and digitalization to public administration. We call that gov tech,” says Vitor Gaspar, director, Fiscal Affairs Department, “and we are collaborating with India in that context as one of the most inspiring examples of the application of technology to solve very complicated issues of targeting support to the people who need it most.” He adds that they are also working with governments in West Africa on gov tech.

Indian civil society would no doubt take umbrage with the comments on Aadhaar and service access, as reflected in this episode of the Biometric Update-produced ID16.9 Podcast. The ID program has also faced criticism for reportedly excluding access to welfare and the legal battle to prevent its compulsory usage.

The IMF is keen to push digital ID for the part it plays in Central Bank Digital Currency (CBDC). The agency recently released a report on digital currencies in Africa.

Article Topics

Aadhaar  |  biometric payments  |  biometrics  |  digital government  |  digital ID  |  financial services  |  IMF  |  India  |  International Monetary Fund (IMF)  |  secure transactions  |  UIDAI