| Abstract: |
Digital innovations in fiscal policy is the du jour for the macro policy
makers, especially in the post-demonetisation India. India showcases the early
three experiments of digitization in public finance – especially financial
inclusion through digital financial services - in the recent Economic Survey.
It highlights that digitization in public finance helped the government to
identify the beneficiaries correctly given the technology it uses. It also
helped in the removal of ghost beneficiaries and thus plugged leakages and
identification errors. An early figure suggests that digitization in public
finances in India has helped to transfer the benefits of welfare programmes to
extent of 41% in MGNREGS, 37% in PAHAL (the LPG subsidy scheme), 14% in
National Social Assistance Program(NSAP) and 7% in national scholarship
schemes.(Economic Survey of India, 2015-16). Yet another successful experiment
in digitization of fiscal policy is the new scheme, Pradhan Mantri Jan Dhan
Yojana. It has ensured financial inclusion in financial services through
opening savings accounts by the masses so that the money is transferred to the
genuine beneficiaries. Another related experiment has been the introduction of
Aadhaar cards which provides a unique online identity to each individual in
the country and has been linked to bank accounts and mobile numbers in order
to ease transactions. Greater use of mobile banking to transfer funds faster
and to solve the last mile banking problem has also been encouraged. The use
of Jan Dhan accounts, Aadhaar cards and Mobile Banking has helped India take a
step closer to the digital revolution that awaits it. Such global experiments
of digitization in finance have happened in Kenya, where geospatial surveys
were used to decipher how much financial institutions have responded to an
increasingly digitizing environment. |