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India Has Building Blocks For Successful Rollout Of Digital Government Transfers

As governments across the world are financially helping their citizens to ward off the economic distress due to the coronavirus pandemic, India is among the countries better placed as it has the building blocks for successful rollout of digital transfer of payments, a report has said.

“India has been at the forefront, digitising programmes like pensions and subsidies to buy cooking gas for poor families,” said Anit Mukherjee, a policy fellow at Washington-based Center for Global Development (CGD), which released a report on Tuesday titled ‘Citizens and States: How Can Digital ID and Payments Improve State Capacity and Effectiveness?’

Co-authored by Alan Gelb, Mukherjee and Kyle Navis, the report found out that as governments across the globe begin to use direct transfers to give money to citizens unable to work, just 56 per cent of citizens across 99 developing countries have access to a phone, a bank account, and an ID.

Those three things, the researchers find, are the building blocks for the successful rollout of digital government transfers, from emergency cash transfers in a pandemic to everyday government programmes like pensions and food subsidies, the report said.

“What India’s experience illustrates is how you need a trio of digital basics to make payments work: a digital ID to prove a person is who they say they are, a financial account for them to receive the money, and a mobile phone that can be both an information hub and a tool to access that money,” Mukherjee said.

More than 50 countries, including the US, have announced some form of cash transfers or social assistance to help tide over the immediate challenges faced by their citizens.

“Governments around the world are moving full-steam ahead to get money in the hands of their citizens who are out of work due to the coronavirus. But we found that for digital payments from governments to work well, countries need to have the digital basics in place: bank accounts, IDs, and phones. And far too many developing countries are running behind on making sure their citizens have access to those basics,” said Alan Gelb, one of the authors of the study and a senior fellow at CGD.

Gleb said that there are a lot of advantages to bring government payments online. It can cut out costly middlemen and time-wasting activities like waiting in line to pick up a ration payment, as well as providing a much stronger defence against corruption. “And, in a crisis like this, it means you have the digital infrastructure ready to go for something like emergency cash transfers,” he added.

India, the report said, has become a laboratory for digitisation, with reforms to a wide range of services and benefit programmes. “India has emerged as a country of special interest, a global laboratory for the deployment of digitised programmes, often at great scale,” it said.

―Business Journal

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