“India must develop domestic capacity as it seeks to double its per capita income in a few years. The country is facing Several persistent geopolitical challenges that may pose a threat to prosperity,” she said. The minister added that the advent of artificial intelligence shall have a sizable impact on the labour market and that too may pose a threat to prosperity.
Sitharaman was addressing the third edition of Kautilya Economic Conclave with the theme ‘The Indian Era’ organised by the Department of Economic Affairs and Institute of Economic Growth.
The finance minister’s remark comes months after Economic Survey 2023-24 stated that the adoption of AI is transforming the job market and India will not “remain immune to this transformation” and called for the government and private sectors to come together in a “grand alliance” to leverage such technology to reshape jobs and not replace them.
“Artificial Intelligence casts a huge pall of uncertainty as to its impact on workers across all skill levels – low, semi and high,” the review, authored by researchers, led by chief economic advisor V. Anantha Nageswaran, stated. The review said AI technologies could even create barriers and hurdles to sustain high growth rates for India.
However, at today’s event, FM Sitharaman asserted that a rising middle class will pave the way for consumption growth.
The India financial system is well capitalised for productive growth and has remained nimble, she said, adding that there is sharp narrowing in financial access between the rich and poor
The government is committed to reducing the fiscal deficit, which is estimated to further decline to 4.9% in FY25, she said at the event. The quality of government spending continued to improve, the capex is budgeted to increase 17%, she said, adding that the government is seeing increasingly investment oriented deficit financing.
The revenue expenditure is lower on decline in commodity prices leading to lower fuel subsidies, she explained.
FM Sitharaman said that buoyant revenues will help reduce fiscal deficit. She also assured that the government has a sustained policy focus for India’s banking sector as highlighted that NPAs are at multi-year low and it’s policy priority to keep it like that. The ease of doing business is central to the government’s policy making, she emphasised.