Shri Subhash Chandra Garg, Secretary, DEA: Better Metric is needed for the Human Capital Index (HCI) to measure the Status of Human Capital;

Structural Reforms in areas like taxation and bankruptcy are helping the Indian economy in building its resilience to global shocks and maintain a robust growth rate despite challenges;

Prudent policy measures have helped, and measures being undertaken now will also help contain the stress currently seen in financial condition tightening, and oil prices etc.

Shri Subhash Chandra Garg, Secretary, Department of Economic Affairs (DEA), Ministry of Finance emphasized the need to recognize that digital technological changes taking place are more fundamental than even invention of the steam engine, which had laid the foundation of the industrial revolution. There is a digital revolution which is transforming the world. Shri Garg was speaking at the IMF’s Development Committee Lunch Session in Bali yesterday. The Session focused on the World Development Report, which is on the changing nature of work. Speaking about the Human Capital Index (HCI) that was released recently as part of the Human Capital Project of the World Bank, Shri Garg commented that Human Capital needs to continuously evolve and develop. HCI uses metric of industrial era to measure the status of human capital for digital age and its production system. He said that a better metric is needed.

Earlier, Shri Subhash Chandra Garg, Secretary, Department of Economic Affairs (DEA) led the Indian delegation to the Annual Meetings Plenary Session of the International Monetary Fund (IMF) and the World Bank yesterday in Bali, Indonesia.

In the IMFC Introductory Session, Shri Garg, Secretary, DEA highlighted the key factors like structural reforms in areas like taxation and bankruptcy are helping the Indian economy in building its resilience to global shocks and maintain a robust growth rate despite challenges. Shri Garg emphasised that Prudent Policy measures have helped, and measures being undertaken now, will also help contain the stress currently seen in financial condition tightening, and oil prices etc.

Of the Four Sessions of the 38^thInternational Monetary and Financial Committee (IMFC) Meeting of the IMF being held during the Annual Meetings, the first two sessions – Introductory Session and the Restricted Session on Early Warning Exercise (EWE) – were held yesterday. Secretary Shri Garg attended both these Sessions. The IMFC Introductory Session was focused on Global Developments and Prospects, while the EWE was focused on Upcoming Risks to the Global Economy.     

Earlier in the day, Secretary Shri Garg also led the Indian delegation in the G-20 FMCBG Meeting in which the deliberations centred on key risks facing the global economy, enhancing a resilient international financial architecture, financing infrastructure development, progress on compact with Africa as well as streamlining of the GPFI process among others.

Secretary, DEA, Shri Garg is currently on an official tour to Bali, Indonesia to participate in the Annual Meetings of the IMF and the World Bank and other associated Sidelines Meetings. He is accompanied by the senior officials of the Ministry of Finance among others.

Human Capital Index metric needs updating to reflect digital era skills, driving policy focus on resilience and reform. A revised metric is required because the Human Capital Index relies on industrial era measures that fail to capture digital age skills, adaptability and production systems, so policymakers should develop an updated HCI reflecting continuous evolution of human capital. Concurrently, structural reforms in taxation and bankruptcy and prudent policy measures are strengthening economic resilience and addressing stresses from financial tightening and oil price volatility, aided by engagement in multilateral risk assessments and financial architecture discussions.