War and Disruption Should Be Avoided, Global Priority to Restore Normalcy: FM Sitharaman

War and Disruption Should Be Avoided, Global Priority to Restore Normalcy: FM Sitharaman

Sub : Eco

Sec: External sector

Union Finance Minister Nirmala Sitharaman emphasized the global need to prioritize peace and normalcy to counter economic disruptions, supply chain breakdowns, and inflation.

Speaking at the Global Economic Policy Forum 2024 organized by CII, she called for collective efforts to address the challenges posed by war and geopolitical tensions.

Key Highlights:

Global Priority: Restoring Normalcy

• Sitharaman urged that wars and skirmishes must be avoided, advocating diplomacy and dialogue to resolve conflicts.
• She stated that disruption caused by wars is the primary reason for global supply chain breakdowns and inflation, which transcends borders.

Tackling Inflation

• Inflation as a Global Challenge:
  • Described as the biggest challenge globally, inflation is fueled by disruptions in food and supply value chains.
• Collaborative Approach:
  • No country can address inflation alone; a coordinated global effort is required.

Realigning Industry Policies

• Sitharaman emphasized the need for industries to align their policies with the country’s political and strategic priorities, particularly in light of disruptions.
• Urged the industry to:
  • Support small and medium enterprises (SMEs) alongside larger corporations.
  • Focus on job creation and equitable economic success.
  • Leverage technology to ensure the spread of benefits across all levels of society.

Responsible Borrowing and Debt Management

• Highlighted the issue of intergenerational debt, stressing that countries must:
  • Borrow responsibly to ensure debt sustainability.
  • Avoid passing unsustainable debt burdens to future generations.
  • Acknowledged India’s pandemic-related borrowing but emphasized its conscious approach to keeping debt levels manageable and focused on asset creation.

Key Recommendations from Sitharaman

• Global Cooperation:
  • Nations must prioritize peace and dialogue to prevent economic fallout from wars.
• Blending Economics with Strategy:
  • Economic policies must incorporate strategic and political considerations to counter supply chain disruptions.
• Inclusive Economic Success:
  • Industries must collaborate with SMEs to enhance job creation and equitable growth.
• Debt Prudence:
  • Countries must focus on sustainable borrowing and avoid excessive reliance on loans that burden future generations.

Global Economic Policy Forum (GEPF) –

The Global Economic Policy Forum (GEPF) is an annual platform that brings together global leaders, policymakers, economists, and industry representatives to discuss pressing economic challenges and propose actionable strategies for sustainable growth and development.