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Sitharaman highlights India’s resilience amid global economic uncertainty (Img: IANS)
New Delhi: India has successfully navigated the economic turbulence caused by global uncertainty and the West Asia crisis, with its economic fundamentals remaining intact, Finance Minister Nirmala Sitharaman said on Saturday.
Addressing the special plenary, “Resilience in an Age of Flux: India’s Economic Priorities”, at the 5th Kautilya Economic Conclave (KEC 2026), Sitharaman said, “India has come through this period remarkably well with its fundamentals intact and strengthened”.
Sitharaman pointed to rising global public debt, which stood at nearly 94 per cent of GDP in 2025 and is projected to reach 100 per cent by 2029. She said such pressures were emerging in an environment with increasingly limited buffers.
“A price shock can be cushioned with monetary and fiscal tools. But a quantity shock tests macroeconomic systems, the reach of delivery systems, and therefore the capacity of the state itself. These shocks have arrived in a world with even thinner buffers,” she told the gathering.
Highlighting India’s economic indicators, the Finance Minister said, “Real GDP grew 7.8 per cent in the first quarter of FY 2026–27. CPI inflation was about 4.8 per cent in August 2026, and the current account deficit was 0.5 per cent of GDP in the first quarter (Q1 FY27),”
She said the government had, since 2014, focused on strengthening three broad capacities: the state’s ability to respond, the economy’s capacity to produce, and the ability of citizens and enterprises to participate in growth.
“The first foundation is strengthening resilience at the household level. This has been done by translating public expenditure and government initiatives into tangible improvements in people’s lives. The use of transparent mechanisms, strict monitoring, and a zeal to deliver ensured that government schemes reached the ground,” she mentioned.
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The Jan Dhan-Aadhaar-Mobile framework and Direct Benefit Transfer helped strengthen the delivery of government assistance. Sitharaman highlighted schemes covering housing, sanitation, cooking gas, healthcare and food security as measures aimed at addressing different aspects of household vulnerability.
Turning to access to finance, she said, “The second foundation is the capacity to turn economic opportunity into productive activity. Access to finance has been central to this effort. The PM MUDRA Yojana has sanctioned over 52 crore collateral-free loans, supporting self-employment and small enterprises,” she noted.
She added, “PM SVANidhi supports street vendors. The formalisation of the economy is also helping increase credit uptake at the desired rate. The government undertook a series of tough banking-sector reforms to strengthen the financial system, including recapitalisation and resolution of stressed assets, along with stronger governance and risk-management frameworks,” according to Finance Minister.
Non-food credit grew 18.8 per cent in the year to August 2026, while the Emergency Credit Line Guarantee Scheme helped businesses meet working-capital requirements and withstand liquidity pressures during periods of disruption.
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Sitharaman also highlighted infrastructure spending as another pillar of resilience. “The third foundation is the infrastructure that connects people, factories, and markets. Its scale determines how efficiently goods move, how widely businesses can operate, and how fully different regions can participate in the economy. In FY 2026–27 alone, we have budgeted Rs 12.22 lakh crore in capital expenditure, nearly matching, in nominal terms, the Rs 12.39 lakh crore spent by the Centre over the entire decade from 2004–05 to 2013–14, including grants for the creation of capital assets,” Finance Minister emphasised.
Effective capital expenditure stands at Rs 17.15 lakh crore, or 4.4 per cent of GDP.
“The cumulative results of sustained investments since 2014 are visible: national highways have expanded by about 61%, operational railway routes have more than doubled, and cargo-handling capacity at major ports has increased by 60 per cent,” she said.
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Sitharaman identified reform-oriented leadership as the fourth foundation of India’s economic resilience. She said Prime Minister Narendra Modi approaches reform as a matter of conviction rather than compulsion.
“The Union government has advanced national frameworks through the GST, the Insolvency and Bankruptcy Code, the four Labour Codes, and the Jan Vishwas Acts,” said Finance Minister.
She also highlighted the expansion of operational airports and the rise in cargo-handling capacity at major ports, while reiterating the importance of banking reforms, working capital and market access in helping businesses cope with external uncertainty.
