New Delhi, October 3 (Daily Kiran) : India has effectively faced global uncertainties arising from the crisis in West Asia, according to Finance Minister Nirmala Sitharaman. Speaking at the 5th Kautilya Economic Conclave in New Delhi, she emphasized the nation’s strong economic foundation during a special session titled “Strengthening in Times of Change: India’s Economic Priorities.”
Sitharaman noted that India has emerged from this period in a notably better position, with its economic base remaining robust. She highlighted that global public debt is projected to rise to nearly 94% of GDP by 2025, potentially reaching 100% by 2029, a level last seen after World War II.
The Finance Minister explained that while monetary and fiscal measures can mitigate price shocks, volume-related shocks test the resilience of economic systems and the state’s capacity. These challenges arise in a world where existing safety nets have already weakened.
She reported that in the first quarter of the fiscal year 2026-27, real GDP grew by 7.8%. In August 2026, the Consumer Price Index (CPI) inflation was around 4.8%, and the current account deficit stood at 0.5% of GDP for the same quarter.
Since 2014, the government has focused on strengthening capabilities essential for sustainable development. This includes enhancing the state’s responsiveness, the economy’s productive capacity, and citizen and enterprise participation in growth.
Sitharaman emphasized that the first foundation is enhancing resilience at the household level. This is achieved through government spending and initiatives that translate into tangible improvements in people’s lives. A transparent system, rigorous monitoring, and a commitment to implementing programs have ensured that government benefits reach the grassroots.
The JAM (Jan Dhan-Aadhaar-Mobile) trinity and Direct Benefit Transfer (DBT) have bolstered systems that provide direct assistance to beneficiaries. Timely implementation of schemes under PM Awas Yojana, Swachh Bharat, Ujjwala, Ayushman Bharat, and the PM Garib Kalyan Anna Yojana has helped alleviate various sources of insecurity for families.
The second foundation is the capacity to convert economic opportunities into productive activities. Access to finance has been a crucial part of this effort. Under the PM Mudra Yojana, over 520 million collateral-free loans have been approved, supporting self-employment and small enterprises.
According to the Finance Minister, the PM Svanidhi scheme aids street vendors. The formalization of the economy is also helping increase loan uptake at desired rates. The government has implemented numerous reforms in the banking sector, including recapitalization, resolution of stressed assets, and improved governance and risk management frameworks.
As of August 2026, non-food credit increased by 18.8% over the year, ensuring continued financial flow for economic activities. A strong banking sector is also assisting enterprises facing external uncertainties. Access to working capital and markets remains critical, and the Emergency Credit Line Guarantee Scheme has supported operational needs and employment during disruptions.
The third foundation is the infrastructure that connects people, factories, and markets. Its scale determines how efficiently goods move, the extent of business operations, and the participation of various sectors in the economy.
Sitharaman highlighted that for the fiscal year 2026-27, a budget of ₹12.22 lakh crore has been allocated solely for capital expenditure. This amount is nearly equivalent to the ₹12.39 lakh crore spent by the central government from 2004-05 to 2013-14, including grants for creating capital assets.
The effective capital expenditure stands at ₹17.15 lakh crore, which is 4.4% of GDP. The cumulative results of investments made since 2014 are becoming evident, with a 61% expansion of national highways, more than doubling of operational railway routes, and a 60% increase in major port cargo handling capacity.
The fourth foundation is strong reform-minded leadership. Sitharaman stated that Prime Minister Narendra Modi views reforms as a matter of firm belief rather than necessity. The central government has advanced a national framework through GST, the Insolvency and Bankruptcy Code (IBC), four labor codes, and public trust laws.
She also mentioned that the number of operational airports has more than doubled and that the cargo handling capacity of major ports has increased by about 60%. Sitharaman referenced various government reforms, including GST, IBC, labor codes, and measures related to public trust.
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