The government would like to partner India Inc in the country’s development, she said at the Confederation of Indian Industry (CII) annual business summit in the Capital on Friday. “We see a very big role for private sector and would like to partner with them for (the) development (of India), with the government acting as a facilitator and enabler,” Sitharaman said.
She exuded confidence that PM Narendra Modi would come back to power after the general elections with a substantial majority. Elections end on June 1 with counting on June 4. “Soon after government is formed, we look forward to a more pointed engagement with CII to see what best can be done in the July budget, which will be the full year’s budget,” she said. “A lot of consultation can begin with CII team as well.”
Growth Story ‘compelling’
Calling India’s growth story “compelling,” the finance minister said that the country will continue to be the fastest-growing economy for the next few years.
India’s economy expanded 7.6% in FY24 and the International Monetary Fund (IMF) has projected 6.8% growth in FY25. Sitharaman said that the fundamental basis for this consistent, steady and high growth is the absence of flip-flops, corruption-free decision-making, and a stakeholder approach while framing rules and laws.
She said India has the potential to contribute significantly to global growth, something that has been recognised by global agencies such as the IMF. The minister also cited an S&P report on the Indian consumer market that states it is likely to double by 2031, presenting a $2.9 trillion opportunity.
Sitharaman said expanding manufacturing will help India become self-reliant and benefit from the opportunity as the world explores a China+1 strategy in the post-Covid era.
“I also want to underline, much against the advice given by some economists who say India should no longer be looking at manufacturing or ramping up manufacturing, that the country must also increase, with the help of policies, its (manufacturing) share in the global value chains,” she said.
Some economists, including former Reserve Bank of India (RBI) governor Raghuram Rajan, have expressed the opinion that India should focus on services rather than manufacturing as it has missed that opportunity.
Citing another report, she said India figures at the top of the list of investment destinations for senior executives in Europe and the United States looking to reduce their companies’ dependence on China and wanting to shift part of their manufacturing capacity to emerging markets.
“With the help of policies, India must increase its share in global manufacturing chains,” Sitharaman said, adding that India needs to have greater sophistication in product manufacturing, and the government needs to see how best this can be given policy support.
