Mumbai: Reserve Bank of India Governor Shaktikanta Das has proposed the establishment of a global platform for sharing debt data, citing the critical issue of high and unsustainable debt levels that have severely constrained the fiscal capacities of numerous countries. Speaking at a seminar hosted by the Ministry of Finance and the Reserve Bank of India as part of the G20 Finance Track National Event, Das highlighted the need for innovative solutions to address these challenges.
Das underscored the importance of risk sharing as a fundamental component of encouraging private financing for global public goods. He emphasised that Multilateral Development Banks (MDBs) could play a pivotal role in facilitating private sector investments through mechanisms that distribute risk.
Drawing attention to the impact of excessive debt levels, Das pointed out that limited fiscal capabilities have hindered countries, particularly evident in the global struggle to access COVID-19 vaccines seamlessly. He proposed three specific recommendations to address these concerns.
His first suggestion revolved around enhancing Debt Sustainability Analysis (DSA) by ensuring that growth and fiscal projections are grounded in accurate and comprehensive debt data. To achieve this, he advocated for the establishment of a global debt data-sharing platform, acknowledging that its implementation might be intricate and time-consuming.
Additionally, Das recommended the exploration of a multilateral debt relief programme tailored to assist low-income countries grappling with substantial debt burdens. He stressed that these efforts should be coordinated and targeted to effectively address the challenges faced by these nations.
Furthermore, Das urged increased support for countries experiencing debt distress from institutions like the International Monetary Fund (IMF) and the World Bank. Recognising their pivotal roles in the global financial landscape, he urged these institutions to expand their assistance to nations facing debt-related difficulties.
In his closing remarks, Governor Das emphasised the significance of implementing timely and non-stigmatised corrective measures, including financing solutions, on a more accessible basis. He highlighted the transformative changes taking place in member countries, citing India’s Unified Payments Interface (UPI) and financial inclusion initiatives as noteworthy examples. UPI has gained widespread popularity in India for facilitating retail digital payments, and the Indian government is actively working to extend its benefits to other countries through partnerships and collaborations in the fintech and payment sectors.
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