Nirmala Sitharaman's Herculean Task: Steering India's Economic Growth

New Delhi: With a new avatar in the Union finance ministry, finance minister Nirmala Sitharaman has a Herculean task ahead in the Modi 3.0 NDA government. Back in the saddle in signs of Prime Minister Narendra Modi preferring continuity in policy, Sitharaman is expected to focus on several economic measures and fast-rack reforms in order to achieve the target of becoming India a $5-trillion economy in near future and turn the country into a ‘Viksit Bharat’ by 2047.

The finance minister is also likely to continue important economic measures, which include the continuing policy focus on fiscal consolidation, new steps to contain inflation, strengthening financial regulators — market watchdog Sebi, banking and insurance regulators (RBI & Irdai) for ease of doing business, relaxing norms to attract more investments, creating more jobs and other welfare measures for the poor and middle class among others.

Sitharaman will resume her stint in the North Block with a long-detailed agenda starting with presentation of the full Union Budget for fiscal year 2024-25. She was also given charge of the finance portfolio in the second stint of the Modi government after the 2019 general elections, becoming the first full-time woman finance minister in India. Even prior to that, she held charge as the minister of state for finance between 2014 and 2017 in the first NDA government under the Modi government.

Soon after the official announcement on the allocation of portfolios in the new Cabinet of the Modi-led NDA government, it was business as usual in the ministries. The Union finance ministry, which will once again be helmed by Sitharaman, also allocated Rs 1.37 lakh crore of funds as instalment for tax devolution to states. A late evening release was also issued on June 10.

As per sources in the finance ministry, the future roadmap for next five years is ready with the ministry. “Even before the Lok Sabha results, the ministry has been working tirelessly with all concerned departments and has already prepared a blueprint in this regard. The top most priority has been given for the new full budget Union Budget 2024-25, which will be presented in a matter of weeks or early next month,” said the sources.

“It is expected that the policy stance of the interim Budget – with a focus on fiscal consolidation will continue, newer themes – to alleviate rural distress through spending on welfare measures as well as boosting manufacturing investments for job creation, will also be taken up. Besides, the finance minister will also have to navigate the economic challenges and focus on sustaining economic growth and curbing inflationary pressures as far as possible,” it said.

Last week, the RBI projected the economy to grow 7.2 per cent in the current fiscal on the back of improving rural demand and moderating inflation. While the economy grew by over 7 per cent in the three years till FY24 and is poised to grow by 7.2 per cent this fiscal, creating adequate jobs for India’s growing workforce needs to be addressed on a mission mode.