New Delhi: Finance Minister Nirmala Sitharaman emphasized the vital importance of political stability and consistent policies for India to attain its ambition of becoming the world’s third-largest economy, a target set by Prime Minister Narendra Modi for the year 2029.
Sitharaman addressed the issue of India’s economic growth during an engagement at the Shri Ram College of Commerce. She highlighted that assuming India’s ascent from the fifth to the third position in the global economy is a given would be an oversimplification. To ensure India’s economic trajectory moves upward, she stressed that political stability, policy consistency, and decisive decision-making are paramount. She further pointed out that industries require policy consistency to stimulate economic growth.
The Finance Minister acknowledged that India’s current fifth-place ranking in the global economy is the result of dedicated efforts from various sectors, including farmers and entrepreneurs. These remarks come in the lead-up to crucial general elections, where a coalition of parties, known as INDIA, seeks to challenge the ruling BJP’s two-term tenure. Prime Minister Modi and his colleagues have argued that their leadership has provided the stability needed to help the economy recover from the COVID-19 crisis and become the world’s fastest-growing major economy. Sitharaman questioned the certainty of this economic stability in a global macroeconomic context, citing worldwide volatility.
Additionally, the minister expressed concerns about supply disruptions in essential areas such as food and fertilizer. The ongoing conflict in Ukraine has led to shortages worldwide, resulting in increased prices for vital commodities like oil and fertilizer. This situation has imposed a substantial subsidy burden, coinciding with rising inflation and slower growth in many parts of the world. To combat inflation, central banks in various countries, including India, have raised interest rates.
Sitharaman stressed the need for forward-thinking governments that embrace reform and provide a consistent environment for business growth. She highlighted the positive impact of the Modi government’s decisions in this regard, differentiating them from previous administrations that she claimed held the country back.
The Finance Minister underlined the Modi government’s approach, which focuses on empowering rather than entitling citizens. This approach includes investments in fundamental necessities and access to essential facilities like housing, roads, drinking water, and sanitation. She noted that policy continuity has played a significant role in attracting a steady flow of foreign direct investment. Furthermore, the recent inclusion of India in JP Morgan’s bond index for emerging markets has the potential to bring approximately $23 billion of investment into the country.
As part of her upcoming engagements, Sitharaman will travel to Morocco for the annual meetings of the World Bank and IMF, where she will advocate for reforms in multilateral agencies to further India’s economic goals.
