Finance minister Nirmala Sitharaman hailed India’s economic resilience amid global turbulence, emphasizing that proactive fiscal and monetary policies, structural reforms, and extensive infrastructure development have helped the country withstand uncertainties.
Speaking on Thursday at the Foundation Day celebrations of state-run Bank of Maharashtra in Pune, Sitharaman said that despite the upheaval felt across the globe, India’s strong macroeconomic fundamentals, a young demographic profile, and reliance on domestic demand form the core strength of the economy, enabling it to see off global shocks and maintain a high growth momentum.
“You are aware that India rebounded strongly and recorded an average annual growth of about 8% between 2021-22 and 2024-25. It stood out as the fastest-growing economy, and this economic resilience has continued, particularly in the April to June quarter this year as well, where our GDP has grown by 7.8%,” she said.
“So, this resilience is not accidental at all. They reflect proactive fiscal and monetary policies, old structural reforms, and massive infrastructure creation, both physical and digital, improved governance, and enhanced competitiveness over the last decade.”
To be sure, India’s economy faces mounting challenges from a volatile global landscape, with geopolitical tensions and protectionist policies creating fresh challenges.
President Donald Trump has imposed a steep 50% tariff on a large set of Indian goods entering the US, particularly products from labour-intensive sectors such as textiles, gems and jewellery, and footwear, while stricter US immigration rules are constraining the service sector, particularly IT and skilled talent mobility.
Global supply chain uncertainties and financial volatility, some experts have cautioned, could slow growth, even though India’s strong domestic demand, low inflation, and robust foreign exchange reserves provide a cushion against external shocks.
Amid these challenges, Sitharaman noted that international rating agencies have revisited their assessment of India, underscoring the resilience and robust fundamentals of the country’s economy.
The rating agencies have reassessed India’s economic fundamentals and, as a result, upgraded the country’s sovereign debt ratings, she added.
On 14 August, S&P Global Ratings raised India’s long-term sovereign rating from BBB- to BBB, the first upgrade in 18 years, citing strong economic growth, fiscal rectitude, and better government spending.
This was preceded by a similar move by Morningstar DBRS in May, and followed by Japan’s Rating and Investment Information Inc., marking a rare streak of upgrades for a major emerging economy at a time of global uncertainty.
India’s retail inflation rose 2.07% year-on-year in August, provisional data from the ministry of statistics and programme implementation showed on Friday, up from a revised 1.61% in July. The Indian economy is likely to grow closer to the upper end of the government’s projected range of 6.3-6.8% this financial year, buoyed by sweeping indirect tax reforms, chief economic adviser V. Anantha Nageswaran said on Monday.
Meanwhile, speaking on the banking system, Sitharaman praised the turnaround from the twin balance sheet problem of 2013–14, citing the professional management of banks, the Insolvency and Bankruptcy Code (IBC), and corrective measures implemented under the RBI’s guidance. The twin balance sheet problem refers to a situation more than a decade ago when companies and banks faced simultaneous stress, with highly indebted firms being unable to repay loans to banks due to poor profitability.
“It is important to remember that the financial institutions play a crucial role in the national infrastructure building and the efforts that go towards it, particularly for MSME enterprises,” she said.
“So, as India’s economy grows, so does the demand for credit and innovative financial products, and capital expenditure,” she added.
Sitharaman emphasized that banks play a critical role not just as custodians of savings, but also as engines of growth, providing the finance and support businesses and entrepreneurs need to navigate volatility, seize opportunities, and drive innovation.
“Grievance redressal must go hand in hand with root cause analysis, systemic corrections, products, processes, and conduct, and a commitment to ensure the same complaint does not arise again,” she said.
“When we repeatedly speak about our youth dividend, the dividend that we have in terms of the younger generation leading us, and their numbers in the productive years being very high, it is important that banks really win their trust, retain their trust and serve their confidence,” she added.
Source from: https://www.livemint.com/economy/epfo-india-formal-jobs-july-unemployment-labour-payroll-11758626356438.html
