Claiming that capitalism has historically created wealth and reduced poverty, Union Finance Minister Nirmala Sitharaman during her day-long visit to Gujarat said, India under Prime Minister Narendra Modi is aware “when” capitalism needs to be “tempered down” for the benefit of communities.

“It is capitalism which historically has proven successful in removal of poverty and in creation of wealth. But today there is a feeling that unbridled capitalism is not good. So you need to have capitalism and fortunately in India under Prime Minister Narendra Modi we understand where capitalism will have to be tempered down a bit so that the communities will benefit and not just one person,” said Sitharaman in response to a question asked by a seventh grade student during an interaction organised by Gujarat Chamber of Commerce and Industry (GCCI) in Ahmedabad on Saturday morning, The student wanted to know if communism, socialism or capitalism was a better system.

“Capitalism with democracy and capitalism which is conscious of its society will be a good solution for all of us,” said Sitharaman who was at GCCI for an interactive session on “Viksit Bharat @2047”.

Rising gold prices

In response to another question asked about rising gold prices, the Finance Minister said, “Gold is hitting the roof in terms of prices. Central banks across the world are buying gold. They are not just dependent on the US dollar. They are buying gold to ensure they have a worthy back-up. RBI is also buying gold. With all the global uncertainties -- three wars going on simultaneously, high sea movement of ships becoming expensive --- people are relying more on gold than any currency. I think we will have to just wait and watch.”

Later while addressing media persons, Sitharaman said that India’s inflation has not crossed the “tolerance band” in the 10 years of Modi-government’s rule. When asked about the rising unemployment in the country, the Finance Minister said, “With regard to employment, I have no idea. The data for the formal sector in India too is incomplete. It is collected only from a section of the formal sector. There is no data on the informal sector. The government may have one on construction workers. Data is inadequate. I am not saying this with pride. I believe this is a weakness. It is so inadequate that no one can study it and take a risk of coming to a conclusion.” 

Earlier while speaking at GCCI, Sitharaman said that when Modi government assumed power in 2014, the economy was not in “good health” as the inflation was in double digits continuously for 22 months and Indian businesses were taking their balance sheets abroad, there was dip in manufacturing and corruption had pervaded all sectors. “The way in which India has restored its economy --- more particularly its banks between 2014 and now -- is actually a lesson for Harvard Business School,” she added.

Assistance to Gujarat

Pointing to the support given to industries in Gujarat under the PLI scheme, Sitharaman said, “Under the PLI we have given a lot of support to the industry. Of the total capital which is coming to set up businesses for manufacturing in India under the PLI scheme, 28 per cent has been attracted by Gujarat... In March 2024, five greenfield bulk drug plants and two greenfield plants for medical devices -- set up with PLI assistance --- were inaugurated by the Union Health Minister. 29 firms covered by PLI are coming in the food processing sector in Gujarat, PM Mitra mega textile park is being set up at Navsari and large investments are coming in the semiconductor sector.”