Bold reforms, enhanced capacities key to India's growth story over next two decades: FM

San Francisco: India's quest for sustained growth over the next two decades hinges on a new paradigm, driven by bold reforms, enhanced domestic capabilities, and strategic institutional collaborations suited for the evolving global landscape, Finance Minister Nirmala Sitharaman said on Monday. The last two Union Budgets have laid the groundwork for this transformation, with a clear multi-sectoral policy agenda, she said, while speaking at Hoover Institution at Stanford University California. In the last decade, she said the government has undertaken structural reforms, rationalising over 20,000 compliances, decriminalising business laws and digitising public services to reduce friction.

She further said a significant thrust on infrastructure development has also created a strong foundation for manufacturing-led growth by bolstering investor confidence over the last 10 years. This has been enabled by a more than four-fold increase in the union government's capital expenditure between 2017-18 and the 2025-26 Budget, she said. "Our experience with implementing the Business Reform Action Plan by different state governments has demonstrated that deregulation is a powerful catalyst for industrial growth," she said. Going forward, the Finance Minister said, sustaining India's growth momentum calls for a fresh approach of bold reforms, adaptive strategies in line with changing global landscape. "Over the next two decades, sustaining India's growth momentum calls for a fresh approach grounded in bold reforms, stronger domestic capacities, renewed institutional partnerships and adaptive strategies suited for the evolving global landscape," she said.

India has set a goal to become a developed nation by 2047, the year when the country would enter the 100th year of its independence from British rule. "As we lay the foundation for a developed India, we must stay committed to long-term goals, without losing sight of present realities. The global order is changing. That poses challenges but also opportunities. We must be prepared to tackle the former while seizing the latter," she said. India's journey to become a 'Viksit Bharat' by 2047 is not merely an aspiration but a shared national mission powered by a vision for inclusive, sustainable, and innovation-led growth, she said. Despite the pandemic shock and a banking crisis, she said, "our progress over the past decade, anchored in strong macroeconomic fundamentals and steady reforms, gives us confidence and direction for the road ahead." As a result, she said, India has risen from the world's tenth-largest economy to the fifth-largest. Quoting a report by Indiaspora and BCG, she said, Indian first-generation immigrants founded 72 unicorns between 2018 and 2023 and these unicorns were worth at least USD 195 billion in valuation and employed nearly 55,000 people. More than 65 per cent of Global Capability Centres (GCC) in India have their headquarters in the US, she said, adding, these GCCs provide high-value-added, bespoke services in areas such as R&D, management consulting and auditing.

Observing that the US is a mature start-up hub which has developed over 50-60 years, while India's start-up journey is a nascent one, she said, "over the course of the last decade, the government's focus was on reducing the cost of entrepreneurial risk-taking by removing regulatory and infrastructural barriers." Some of the works done in India stand out and one such example is that of Digital Public Infrastructure (DPI) and its success, she said. More than a billion digital identities have been created using DPI, she said, adding, using these digital identities bank accounts of people were created and during Covid-19 pandemic, money was transferred by the government in a click of a button. "DPI also was useful in administering vaccines during Covid-19 pandemic. In my interactions with the G20, the World Bank or the IMF, this singular population-scale achievement of India is repeatedly lauded," she said. Speaking about the government's thrust on small and medium business, Sitharaman said, a vibrant and thriving network of small and medium enterprises is essential for domestic manufacturing growth. The government has undertaken numerous initiatives to support MSMEs, from easing access to credit, redefining size thresholds, facilitating prompt payments from large buyers and simplifying compliance burdens, she said. "The Open Network for Digital Commerce, launched in April 2022, has successfully onboarded more than 764,000 vendors across 616 cities. "Our next focus is reducing regulatory frictions, digitising approvals, and integrating MSMEs into global value chains. Special support to women-led and rural enterprises will help enhance economic opportunities and ensure more inclusive growth," she said. With regard to encouraging and increasing participation of women in labour forces, Sitharaman said, maternity leave has been increased to six months.  "Two years ago, we came up with a scheme where we increased interest rates on deposits made by women to 7.5 per cent to encourage women to keep their savings in banks rather than keeping that as cash at home, she said, adding that property registration in the name of women has tax concessions. Under the Poshan Scheme, she said, the nutritional needs of pregnant women and lactating mothers are being met. Under PM Awas Yojana, registration of 'pucca' houses is done either in the name of a woman or jointly with that of a male member, she added.