Government is working on ways to bring down debt, Finance Minister Nirmala Sitharaman said on Friday.

According to Moody’s Investor Services, India has a high level of general government debt, estimated at around 81.8 per cent of GDP for 2022-23, compared with the ‘Baa’-rated median of around 56 per cent.

Addressing the Kautilya Economic Conclave 2023 here, she said the government acutely conscious of ensuring macro-economic stability in the country.

“We are conscious of matters related to macro economic stability of the country and responsibility with which we deal with our fiscal management. So for every decision that we take today, we are conscious of what burden we are going to leave for the next generations,” she said.

She also said the government actively looks at the data related to debt of emerging market countries and how they are managing them. “The government is successful in managing debt burden because efforts are very well streamlined to meet India’s aspirational requirements, but deal with it with a sense of responsibility so that coming generations don’t feel the burden,” she said.

During the Covid-19 pandemic, she said, the government spent money in creating public infrastructure so that there is better return for every rupee rather than give in to the temptation of putting money in the hands of people who were suffering .“We didn’t do that. But I think some principles of economics stand the test of time and that is why (the government decided) to spend money in capital expenditure and with a digitised approach so that people can see where that money is going,” she added.

PMJDY

She said that Pradhan Mantri Jan-Dhan Yojana (PMJDY), has emerged as the biggest instrument of bringing financial inclusion in the country. She said benefits under more than 50 government schemes are being directly transferred into the beneficiaries’ bank accounts, and PMJDY has played an important role.

She also said when the scheme was launched, a certain section of people had made “snide” remarks saying public sector banks would be under pressure as these are zero balance accounts. However, these accounts have a balance of more than ₹2-lakh crore, Sitharaman said.

Crypto Regulation

The Finance Minister noted in her remarks that the matter of cryptocurrency was taken up at the recently concluded G20 group for consensus on whether it should be regulated, and if so, how. “The G20 is now coming out with a template for the crypto world, she added.

Concerns about Multilateral Institutions

The FM expressed concerns about the inadequacy of major multilateral institutions, including the United Nations, the World Health Organisation, the World Trade Organisation and the UNSC. “Interventions by these organisations other than multilateral development banks, are currently less effective than ideal. This decline in effectiveness is reshaping strategic blocks across the world, impacting supply chains, and has far-reaching consequences,” she said.

Food security

India is working on establishing a template to maintain food security, she said. “There should be a regional balance for basic staples for sufficiency and security,” she said. This effort goes beyond India‘s borders, as the Finance Minister highlighted the importance of regional balance for basic staples, to ensure food sufficiency and security, particularly in the context of global uncertainties.

Global terrorism posing risk for businesses

Sitharaman also touched upon the pressing concern of global terrorism, acknowledging that it has become a “permanent uncertainty” with a high-cost risk associated with it. This serves as a primary risk for businesses worldwide, and economic policies alone are insufficient to address it. Companies need to factor in the impact of terrorism on their operations and strategies, she said.

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