Micro Reforms Like Aadhaar, UPI Aiding Formalization of Economy: BlackRock Report

New Delhi, Dec 4 (KNN) Calling initiatives like Aadhaar, UPI and Open Network for Digital Commerce (ONDC) as 'micro' reforms,  BlackRock Investment Institute has said that these digital drives are integrating more households and businesses into the formal economy and lowering transaction costs.

In its report titled "2026 Global Outlook", the BlackRock Investment Institute noted that India’s financial system is becoming a key engine of growth as rising domestic savings and digital infrastructure expand capital formation.

"These changes can help India fund a large share of its capital spending from domestic savings, supporting current-account stability and keeping external debt near 20% of GDP. They are also broadening domestic participation in capital markets and creating a more stable base for long-term financing," the report said.

The report highlighted the strong fundamentals of the Indian economy and stated that overall government policy remains supportive.

It cited the recent Goods and Services Tax (GST) rate overhaul, corporate tax rationalization and streamlined state-level approvals to suggest that regulation is becoming simpler.

"Fiscal policy is pairing discipline with investment, while regulators have pushed for greater transparency in mutual fund pricing and lower investor cost," the report underscored.

The report noted that in a world of concentrated return drivers, India is one of the few large markets with distinct underlying drivers, including resilient domestic demand, reform and a young workforce.

It further said that India’s growth mix is shifting in ways consistent with the global move toward more capital-intensive and technology-enabled investment.

The BlackRock report said that India is projected to grow 6–7 percent annually through the decade, keeping it a durable contributor to global growth.

External pressures from oil, a strong dollar or global risk-off remain near-term watchpoints, the report pointed out.

(KNN Bureau)