India’s reform momentum continues: Nirmala Sitharaman

New Delhi: India’s reform momentum remains unabated, presenting “plenty of” investment and collaboration opportunities in the country, finance minister Nirmala Sitharaman told investors at a round table in Washington DC on Wednesday.

Sitharaman said the government is committed to its reform agenda, aimed at creating a stronger and dynamic economy, overcoming challenges posed by the Covid-19 pandemic.

In separate meetings with IMF officials and finance ministers from other countries, Sitharaman highlighted the spillover effects of combating global inflation on developing countries and the need for world leaders to urgently address debt distress in poor nations.

Sitharaman is currently in the US to attend the spring meetings of the World Bank and the International Monetary Fund (IMF) in addition to G20 meetings.

At a round table on ‘Investing in the India decade’ organised by industry chambers FICCI and US India Strategic Partnership Forum on the sidelines of spring meetings of the multilateral agencies, Sitharaman reiterated that “the government is committed to pursuing the reform agenda for building a stronger and more dynamic India to provide plenty of opportunities for collaboration and investments, and welcomed the participants to join this incredible journey,” the finance ministry said in a social media post.

Despite the reality of reset across the globe and the challenges posed by Covid pandemic, India‘s reform momentum remains unabated, the ministry said quoting Sitharaman.

Separately, Sitharaman met Mohammed Aljadaan, Saudi Arabia’s finance minister, and held discussion on an expert group set up by the G20 to strengthen multilateral development banks. 

The two leaders also discussed global inflation issues, including the spillover effects of the inflation-fighting measures on the growth prospects of developing and low income countries and the urgent need to tackle increasing global debt distress and improving the implementation of the G20 common framework on debt treatment, the ministry said in its social media post. As per IMF estimate, about 60% of low-income countries are at high risk or already in debt distress as of 2021. In 2015 that number was below 30%.

Sitharaman, who also met IMF first deputy managing director Gita Gopinath earlier on Wednesday, noted the multilateral agency’s concerns on key downside risks to the economy including financial sector stress, rising real interest rates, elevated debt, inflation, geo-political fragmentation, and faltering growth in China, the ministry stated. Sitharaman underlined the progress made in India’s digital public infrastructure (DPI) platform, with most constitutional languages now having access to the platform.

In its latest World Economic Outlook released on Tuesday, IMF lowered its baseline forecast for 2023, which assumes that the recent financial sector stresses are contained, from 2.9% made in January to 2.8%. “Risks to the outlook are heavily skewed to the downside, with the chances of a hard landing having risen sharply,” IMF said. The multilateral agency’s latest forecast for India’s growth in FY24 is 5.9%, down from the January forecast of 6.1%.