 "RBI Governor Shaktikanta Das and Deputy Governor M D Patra")
Reserve Bank of India Governor Shaktikanta Das on Friday said India’s continued engagement with the Unified Payments Interface (UPI), particularly during and after the Covid-19 pandemic, shows that digital public infrastructure can play a vital role as a global public asset when extended beyond national borders.
“India's experience has shown how digital public infrastructure can be utilised for advancing financial inclusion and productivity gains through cost reductions,” Das said while speaking at the G20 Finance Track National Event.
Introduced in 2016, UPI has become the most popular payment mode in the country with transactions in July clocking close to 10 billion, worth Rs 15.34 trillion.
Das emphasised that the involvement of the private sector is essential in both contributing to the creation and funding of global public assets like the UPI. He said this engagement is crucial not only due to the role these entities play in fostering a conducive environment for business growth but also because it presents a commercially viable opportunity.
“While the UPI has been a public sector-led initiative, it is not necessary that public goods can only be developed and financed by the public sector. The private sector needs to engage in the provision of global public goods, not just because they create an energetic ecosystem for businesses to thrive, but also because they would be commercially viable in the long run. In this regard, it is worthwhile to build innovative design features which private investors find attractive in financing global public goods,” said Das.
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The RBI governor suggested that the establishment of a global debt data-sharing platform for realistic debt sustainability analysis, and the implementation of a targeted multilevel debt relief program for low-income countries focused on sustainable development can be a resort for the countries facing constrained fiscal capacities due to high and unsustainable debt levels.
The governor also suggested the strengthening of the IMF’s role through less conditional and timely corrective measures for countries facing debt distress.
Das said climate change is a long-term concern, and potential financial stability impacts should be monitored while securing affordable financing for green transition. Addressing both physical and transitional climate risks is crucial for a smooth transition that avoids economic disruptions.
“Even as the global economic outlook is marred by risks to downside, long-term structural challenges, such as climate change, must be addressed through supply of adequate and affordable financing for green transition. We must, however, be mindful of the potential financial stability implications of green transition. The transition efforts must address both physical and transition risks of climate change. Smooth and orderly green transition is absolutely necessary to avoid disruptions to economic activity and loss of growth potential,” said Das.
