Sitharaman Urges Resilience & Private Investment

Finance Minister Nirmala Sitharaman indicated that global uncertainty is expected to continue in the coming period, creating an urgent need to design policies built to establish resilience. Highlighting priorities for dealing with the next decade of global economic shock, she said it is now time to have ‘autonomy’ in building resilient supply chains.

The Core Economic Numbers

Data highlights the current state of public and private financial commitments toward innovation and structural growth:

• India’s expenditure on research and development stands at 0.83% of gross domestic product.
• The Organisation for Economic Co-operation and Development average for research and development expenditure is 2.7%.
• The private sector contributes only 36% of the total research and development expenditure.

Sitharaman stressed that raising both the scale of investment and private sector participation is essential to strengthening innovation capacity. She added that industry must also play a greater role in designing and delivering training for skill development amidst a ‘changing world of work’.

Understanding Economic Resilience

Resilience means building upon the structural foundations laid over the past decade to accelerate and broaden growth. The Finance Minister pointed out that the evidence of this strength lies in counterfactual outcomes that avoided severe negative disruptions.

• An inflation spiral did not take hold.
• Queues did not form at the fuel outlets.
• Banking stress did not surface.
• A fiscal correction was never forced.

These prevented outcomes demonstrate the enhanced capacity to absorb macroeconomic shocks effectively.

The Future of Global Trade

Amid persistent global uncertainty, Sitharaman called upon nations to have ‘open, predictable and rule-based global economic relationships’. She suggested that nations should engage with one another through dialogue and negotiated agreements, rather than allowing geopolitical differences to become barriers to trade and investment.