Nirmala Sitharaman Says Govt Sees Clear Advantage In Central Bank Digital Currency

The finance minister, who was speaking at the India Global Forum's annual summit in Bengaluru, said the ‘Digital Rupee’ is a conscious call taken in consultation with the Reserve Bank of India

Union Finance Minister Nirmala Sitharaman at the Investiture Ceremony of Central Board of Indirect Taxes and Customs, in Bengaluru on Monday. Image: PTI

New Delhi: Union Finance Minister Nirmala Sitharaman on Tuesday said that the government sees clear advantage in a central bank driven digital currency.

The finance minister, who was speaking at the India Global Forum's annual summit in Bengaluru, said the ‘Digital Rupee’ is a conscious call taken in consultation with the Reserve Bank of India (RBI).

According to a report by the PTI, Sitharaman said, “It was a conscious call taken in consultation with the central bank; the RBI....we would like them to design it the way they would like to do it, but this year we expect the currency to come out from the central bank itself.”

“We see clear advantages in a central bank driven digital currency, because in this day and age, bulk payments happening between- countries, large transactions between institutions and large transactions between central banks themselves of each country- are all better enabled with digital currency,” she said.

When asked about regulating the crypto sector, Sitharaman said that the government is not willing to regulate or ban it; the government would talk about it. “The consultations are on....anybody interested in this domain are welcome to participate, after the consultation process gets duly completed, the ministry would probably sit and mull over it, which is required because we need the executive to be sure that we are not crossing any legal requirements, post which we will be coming out with what's our position on it,” she said.

When she was asked about the future for crypto in India, the minister replied, “Many Indians have seen a lot of future in it, and therefore I see a possibility for revenue in it.”

Speaking on the Budget 2022-23, Sitharaman said the reference to the ‘Amrit Kaal’ in the Union Budget is for more and more of digitisation, more and more of technology.

“Infusing technology into the country in every aspect of our business is going to be a challenge, because we are also labour rich, in the sense intense skilled, semi-skilled, partly skilled, high technology skilled youngsters are in abundance, so how are we going to have these two sit side by side, without hurting each other, that is where this Budget is important,” she said.

Sitharaman, while pointing out the announcement of 75 Digital Banking Units in this Budget, said India needs them because the country is at a stage where in spite of pushing through a nationalised banking network for 75 years, banking and financial inclusion have not been as much as what we wanted them to be.

The finance minister, while highlighting the way in which an economy like India addresses its demand side issues is also to look at the bottom most layer of our population which has several disadvantages, said it need to be ensured that they don't remain hungry, they are not uncertain about food requirements to their family, and meet their emergency expenditures like health.

“Demand side is being addressed in the ways in which it directly makes a difference to the daily livelihood of the person.....” the minister added.