File picture of Reserve Bank of India (RBI) Governor Shaktikanta Das
| Photo Credit: ANI

Reserve Bank Governor Shaktikanta Das on Thursday (September 5, 2024) said the fundamental drivers of the Indian economy are gaining momentum and the country is moving on a sustainable growth path.

In the inaugural address at FIBAC 2024, the governor said that massive changes are taking shape in various economic sectors and markets, and the country is geared for orbital shifts.

“Our nation’s journey towards becoming an advanced economy is drawing strength from a unique blend of factors, and these factors would include a young and a dynamic population, a resilient and diverse economy, robust democracy, and a rich tradition of entrepreneurship and innovation,” Mr. Das said.

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Stressing that India’s growth story is intact and banks have robust balance sheets, he exhorted the private sector to step up investments in a big way.

He said data actually shows that the fundamental growth drivers of the Indian economy are actually gaining momentum and they are not slowing. “This gives us the confidence to say that the Indian growth story remains intact,” he said.

In his speech, the governor said past reforms like GST and IBC have yielded long-term positive outcomes, and emphasised the need for further reforms in land, labour, and agri markets.

While acknowledging that headline inflation matters, he said the balance between inflation and growth is well-poised.

With monsoon progressing well and healthy Kharif sowing, food inflation outlook could become more favourable, he added.

Mr. Das further said the financial sector must expand access and harness digital platforms to drive inclusive growth.

He also made a strong case for tailored products and services for women-led businesses and MSMEs without diluting underwriting standards.

Mr. Das further noted that only regulated entities will be allowed on Unified Lending Interface (ULI) platform to ensure prudent lending. “ULI will not be a select club of few players,” he said.

Union Finance Minister Nirmala Sitharaman addresses the Federation of Indian Chambers of Commerce and Industry (FICCI) National Conclave on ‘Viksit Bharat@2047’, in New Delhi on February 27, 2024.
| Photo Credit: ANI

Finance Minister Nirmala Sitharaman on February 27 exuded confidence that India Inc will align itself to the developmental goals of the nation with an objective of making the country a developed nation or ‘Viksit Bharat’ by 2047 on the 100th anniversary of independence.

Ms. Sitharaman said Prime Minister Narendra Modi has clearly indicated that the goal of Viksit Bharat is to be attained to provide the future generations a better India.

Addressing a session on ‘Viksit Bharat @ 2047: Viksit Bharat & industry’, organised by FICCI, the minister said that industry’s role is critical in achieving the goal by 2047.

“You were with India during the freedom struggle, you built industry and capacity despite the colonial pressure…So Indian industry has always kept that spirit up and against terrible odds kept moving along on national interest.

“I can’t see how they will be left out in this game of building a developed India by 2047. So it should be natural to India’s industry to align itself with India’s developmental interests, and after all industry will be the first contributor as much as the first beneficiary…,” the Minister said.

The Finance Miniter also assured the industry that reforms will continue in the third term of the Prime Minister Narendra Modi-led government.

The new government will be formed after the general elections due in April-May and the BJP is confident that Prime Minister Modi will return to power with a greater majority.

Ms. Sitharaman said that India has moved up to become the fifth largest economy and is on the way to become the third largest global economy.

Even after Covid, she emphasised that the government showed its commitment by ramping up capital expenditure. Indian industry can now surely move forward with a great speed globally as investments are coming in.

It is time for the Indian industry to also capitalise, the finance minister said.

She said that several reforms were undertaken by the government during the last 10 years and the trend will continue.

She said that the reforms to be undertaken by the next Modi government will touch on factors of production.

The Minister further said today, without digital infrastructure, no country can move at a pace at which it wants to achieve developmental goals for its own citizens.

India, she said, has shown how making investment in creating the digital infrastructure at the bottom, and scaling it up, led to creation of ‘India Stack’.

“…other than the traditional factors of production like land, labour, capital and the enterprise, I would put digital infrastructure as an important factor, without which we will not be able to scale up and bridge the gap with those who are still aspiring to move forward,” the Minister said.

Ms. Sitharaman also told the gathering that the government is focussing on areas like space and artificial intelligence (AI).

“We have emphasised that India should become a global hub for AI and we will set up centres of excellence for the same,” she said, adding, a great leap forward has been made in logistics.

Whether it is logistics, agriculture productivity or tourism, India has immense potential and government is committed to its policy.

“That is why the prime minister is confident that in the third term we will be the third largest economy. It’s because of the push which he likes to give in these areas, not just fiscal, but legislative and other measures as well,” the Minister said.

Renewable energy has better prospects for not just solar or wind, but the government is also looking at renewing its commitments to hydroelectric power, she said, and added that in green hydrogen and green ammonia, big investments are happening in India.