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The government is planning to accelerate the digitization of society by taking necessary intensive reform measures over the next year, according to informed sources.

The plan is included in a draft of the government’s basic economic and fiscal policy guidelines, planned to be drawn up in mid-July.

The draft points out that the novel coronavirus crisis has shed light on a delay in digitization in the country.

Meanwhile, it does not directly refer to the government’s goal of turning around the country’s primary budget balance in fiscal 2025, due to difficulties reducing the fiscal deficit, which has increased substantially because of huge spending on measures in the fight against the virus crisis.

The government has failed to smoothly carry out its blanket cash handout program to distribute ¥100,000 per person as coronavirus relief, hindered by a delay in the issuance of the My Number social security and taxation identification card, highlighting the slow progress in the digitization of various systems in society.

“There is no time to lose” to make up for the delay in digitization, the draft says, showing the government’s plan to establish a new headquarters comprising private-sector experts and officials from related government agencies at the Cabinet Secretariat to promote intensive reforms for digitization.

It says that the government “will protect the Japanese economy so that the country will not return to deflation.”

While stopping short of directly touching on the primary balance goal, the draft notes that the government will “steadily carry out” measures included in last year’s policy guidelines, such as the primary budget surplus goal, indicating its stance of attaching importance to fiscal discipline as well.

According to the draft, Japan will protect free trade through international cooperation at a time when protectionism is becoming dominant globally.

While mentioning plans to develop risk management rules for infectious diseases relating to cross-border travel, the draft stresses that Japan “will lead efforts to realize free and fair rules on trade and investment.”

To stabilize the financial system, the government will promote capital participation in private financial institutions under the law to strengthen financial functions, the draft says.

The government expects the Bank of Japan to advance monetary easing to achieve its 2 percent inflation goal, it also says.

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