Inflation, debt, supply chain hurdles call for integrated action from govt, industry: FM

Union finance minister Nirmala Sitharaman

Unabated inflation, unsustainable debt, disruption of supply chains, and lack of food security are among the top challenges where the industry and the government need to work together, Nirmala Sitharaman said while listing out the priorities of the finance minister for the next one decade.

“The industry, along with policymakers, will have to work on larger goals to address global concerns. Need to restore global calm, not enough justifiable reasons for war and disruptions of supply and food value chains,” Sitharaman said at the Global Economic Policy Forum 2024, organised by the Ministry of Finance and industry body Confederation of Indian Industry (CII).

“Inflation globally is a big challenge, it's contagious. Primary cause of Inflation is disruptions,” she said.

"It is incumbent on the government, policymakers and the industry to have some normalcy. We have to inbuilt in our decision-making not only economic sense but also political sense. No political risks should threaten the well -being of people. Supply chain lessons should tell us that the industry needs to realign not only from an economic sense," she said.

Borrowings

Talking of high debt levels of governments at national and state levels, the finance minister said that the future generations cannot be burdened with unsustainable levels of borrowings.

“Responsible economies can't run with large borrowings. Important for governments, industry to work on how debt can be managed at national and sub-national levels. Cannot burden the fourth generation with unsustainable debt,” she said.

The governments borrow for building assets, but it cannot be left for the next generation to worry about how it will be serviced. Financial security is important, she added.

Food security

Sitharaman said that the agri stack will be the next big thing from India after digital public infrastructure.

Agri stack is a digital infrastructure project that aims to improve agriculture in India by using data and digital services. “Climate change has put forth a challenge to find resources to build infrastructure to withstand extreme vagaries of nature. Climate challenges need to be looked at from other areas apart from emissions. We need to ensure food security. Agriculture practices need to be looked at to replace some crops without depending upon too much on water. It will reduce inflationary pressures on agriculture,” she said.

India’s digital public infrastructure, agri stack have brought in the advantage of technology. Agri stack is going to be the next big thing from India, she added.

Job growth

The finance minister pointed out that the industry needs to ensure if they want youth training in particular skill sets and cannot depend on someone else to provide that.

“The industry should work on priority to ensure youth get trained in the skill sets they need. That needs to be a decadal priority as much as for the government. Access and opportunities for youth in far-flung areas need to be generated,” she said.

MSME enterprises need to spread across India. The industry should work with MSMEs to support job creation, she added.

CII President Sanjiv Puri earlier said that India can emerge as a formidable partner in rebalancing global supply chains.