Nirmala Sitharaman confident about India’s robust economic growth

India’s transition away from coal hampered by the Russia-Ukraine war, Indian FM tells US think tank

Indian Finance Minister Nirmala Sitharaman is confident about India posting robust economic growth this decade as it makes a ‘distinct’ and ‘pronounced’ recovery from Covid-19 pandemic amid global crises.

“As we look at India, given the pandemic and the recovery from it, and also where we stand today, we see a very robust decade where India would definitely be one of the fastest growing economies,” she told a Washington think tank Monday.

India undertook various structural reforms before the Covid-19 pandemic and turned it into an opportunity to push them further after the pandemic, Sitharaman said at a roundtable organized by the Atlantic Council.

Read: Growth of Indian economy lies in the hands of states: Richard Rossow (September 6, 2016)

A distinguishing feature of India’s response to the pandemic has been an emphasis on supply-side reforms rather than total reliance on demand management, she said.

“Prior to the pandemic, because digitization was happening, we brought in a financial inclusion program never seen anywhere in the world,” Sitharaman said.

“India’s low-cost, at-scale digitization improves ease of living for its citizens in all income categories,” she said. “Adoption of technology, I am so pleased to see, that it has gone down to villages…They’re now very savvy about using it.”

Sitharaman is in Washington to attend the annual spring meeting of the International Monetary Fund and the World Bank.

The World Bank announced last week that India’s GDP is expected to grow 8% percent, representing important progress considering the country’s economic stagnation amid the pandemic.

Once pandemic linked uncertainties abate and the current state of uncertainty clears up, Sitharaman expected capital expenditure by the private sector to ramp up, leading to investment growth, employment generation and economic expansion.

India’s transition away from coal as a fuel would be hampered by the Russia-Ukraine war, Sitharaman said.

“One calculation which I think we had in our mind was that the transition [ away from coal] … will be enabled by natural gas,” she said.

However, the price of crude has gone up due to the situation in Europe, as has the price of natural gas — a “transition fuel” for India — in addition to it being in short supply, Sitharaman noted.

“The dependence on coal, and the speed with which we want to get out of it, will now be challenged,” she said,

However, India’s “commitments to refashion our energy basket remains intact,” Sitharaman said, adding that Prime Minister Narendra Modi’s commitments at COP26 are being “taken seriously” by the country.

A recording of the program can be viewed at: A conversation with the Indian Finance Minister Nirmala Sitharaman