‘Bold reforms key to India’s growth for next two decades’

India’s quest for sustained growth over the next two decades will be driven by bold reforms, an enhanced domestic economy and institutional collaborations designed to tackle a fast-changing world, Finance Minister Nirmala Sitharaman has said.

She said the last two Budgets have laid the groundwork for this transformation, with a clear multi-sectoral policy agenda, she said, while speaking at California’s Stanford University.

In the past decade, the government has undertaken structural reforms, rationalising over 20,000 compliances, decriminalising business laws and digitising public services to reduce friction, Sitharaman said.

She further said a significant thrust on infrastructure development has also created a strong foundation for manufacturing-led growth by bolstering investor confidence over the past 10 years.

This has been enabled by a more than four-fold increase in the union government’s capital expenditure between 2017-18 and the 2025-26 Budget, she said.

“Our experience with implementing the Business Reform Action Plan by different state governments has demonstrated that deregulation is a powerful catalyst for industrial growth,” she said.

“Over the next two decades, sustaining India’s growth momentum calls for a fresh approach grounded in bold reforms, stronger domestic capacities, renewed institutional partnerships and adaptive strategies suited for the evolving global landscape,” the Finance Minister said.

India has set a goal to become a developed nation by 2047, the year when the country would enter the 100th year of its independence.

“As we lay the foundation for a developed India, we must stay committed to long-term goals, without losing sight of present realities. The global order is changing. That poses challenges but also opportunities. We must be prepared to tackle the former while seizing the latter,” she said.

Despite the pandemic shock and a banking crisis, she said, India’s “progress over the past decade, anchored in strong macroeconomic fundamentals and steady reforms, gives us confidence and direction for the road ahead”. As a result, she said, India has risen from the world’s 10th-largest economy to the fifth largest.

Quoting a report by Indiaspora and BCG, she said Indian first-generation immigrants founded 72 unicorns between 2018 and 2023 and these unicorns were worth at least $195 billion, employing nearly 55,000 people.

Some of the infrastructure projects in India stand out, such as the country’s Digital Public Infrastructure (DPI), she said.

More than a billion digital identities have been created using DPI, she said, adding, using these digital identities bank accounts of people were created and during Covid-19 pandemic, money was transferred by the government in a click of a button.

“DPI also was useful in administering vaccines during Covid-19 pandemic. In my interactions with the G20, the World Bank or the IMF, this singular population-scale achievement of India is repeatedly lauded,” she said.

Speaking about the government’s thrust on small and medium business, Sitharaman said, a vibrant and thriving network of small and medium enterprises is essential for domestic manufacturing growth.

The government has undertaken numerous initiatives to support MSMEs, from easing access to credit, redefining size thresholds, facilitating prompt payments from large buyers and simplifying compliance burdens, she said.

“The Open Network for Digital Commerce, launched in April 2022, has successfully onboarded more than 764,000 vendors across 616 cities.

“Our next focus is reducing regulatory frictions, digitising approvals, and integrating MSMEs into global value chains. Special support to women-led and rural enterprises will help enhance economic opportunities and ensure more inclusive growth,” she said.

With regard to encouraging and increasing participation of women in the labour market, Sitharaman said, maternity leave has been increased to six months.

“Two years ago, we came up with a scheme where we increased interest rates on deposits made by women to 7.5% to encourage women to keep their savings in banks rather than keeping that as cash at home, she said, adding that property registration in the name of women has tax concessions.