📷 Image Credits: Mint
In a significant move for India’s economic landscape, the re-appointment of Nirmala Sitharaman as Finance Minister under PM Narendra Modi’s government has raised hopes for continued stability and growth. Sitharaman’s previous term was marked by fiscal prudence and a strong economic recovery post-COVID, setting high expectations for her second term.
During her initial tenure, Sitharaman implemented several reforms, including the consolidation of public sector banks, simplification of tax slabs, and strategic economic stimulus amidst the pandemic challenges. Market experts have acknowledged her efforts in maintaining macroeconomic stability while prioritizing growth and fiscal discipline. Her return signals policy continuity and a focus on fiscal consolidation to drive economic growth.
With an 8.2% GDP growth in 2023-24, fastest among major economies, and inflation below 5%, Sitharaman’s fiscal policies have strengthened India’s macroeconomic fundamentals. The reduction of fiscal deficit and positive outlook from rating agencies highlight the government’s financial prudence under her leadership. As she gears up for her 7th Budget, all eyes are on balancing fiscal consolidation with measures to boost rural growth and consumption.
Expectations are high for Sitharaman to further emphasize privatisation, banking sector reforms, infrastructure development, and policies promoting manufacturing and innovation. Key priorities include simplifying tax structures, fostering startup growth, and supporting sustainable development initiatives. The market anticipates a continuation of policies that stimulate economic growth and job creation across various sectors.
While facing challenges like diverging fiscal demands of coalition partners and potential delays in critical reforms, Sitharaman’s proactive approach, coupled with a strong fiscal position, provides flexibility to drive forward economic policies. As India continues on its growth trajectory, Sitharaman’s return is met with optimism for sustained economic stability and progress.
