In next 10 years, we need to make India’s economy self-reliant: PM Narendra Modi

In a significant address marking the 90th year of the Reserve Bank of India (RBI), Prime Minister Narendra Modi articulated the imperative of fortifying India’s economic self-reliance to mitigate external challenges. Modi underscored the necessity of ensuring that the Indian economy remains resilient against global crises.

Emphasizing Economic Resilience

Modi stressed, “In the next 10 years, we need to make India’s economy self-reliant. We have to make efforts to ensure that our economy is much less affected by the crisis from across the world.” With India’s notable 15 percent contribution to global GDP growth, Modi highlighted the country’s pivotal role as a growth engine globally.

Efforts are underway to bolster the global acceptance and accessibility of the Indian rupee, aiming to elevate it to the status of a global currency. Recommendations by the RBI-appointed Inter-Departmental Group (IDG) include measures such as incorporating the rupee into the Special Drawing Rights (SDR) basket and recalibrating the foreign portfolio investor (FPI) regime.

Revamping India’s Banking Sector

Commending the RBI’s endeavors in revitalizing India’s banking sector, Modi reflected on the significant transformation witnessed since 2014. Back then, the banking sector grappled with challenges, notably high levels of Non-Performing Assets (NPAs), casting doubts on its stability and future.

Through strategic measures and reforms, India’s banking system has transitioned into a robust and sustainable entity. Capital infusion of Rs 3.5 lakh crore into public sector banks and governance reforms have bolstered their health. Notably, the implementation of the Insolvency and Bankruptcy Code (IBC) has facilitated the resolution of bad loans, amounting to Rs 3.25 lakh crore.

Driving Economic Growth

The twin balance sheet issue, once a formidable challenge, has now been relegated to history. Modi highlighted the remarkable turnaround, with banks witnessing credit growth of around 15 percent. The banking sector, once on the brink of collapse, has not only regained profitability but also demonstrated accelerated credit growth.

Modi attributed this transformation to the government’s clarity in policies, intentions, and decisions, coupled with concerted efforts and honesty. He reiterated, “If intentions are correct, policies are right. If policies are correct, decisions are right, and when decisions are right, the outcome will also be right.”

Inflation Management

Addressing the issue of inflation, Modi lauded the successful implementation of the inflation targeting framework. With measures such as active price monitoring and fiscal consolidation, India has managed to keep inflation at moderate levels, despite global adversities such as the COVID-19 pandemic and geopolitical tensions.

Under the inflation targeting framework, the government has mandated the RBI to maintain inflation at 4 percent, with a band of +/- 2 percent. Recent data indicates consumer price-based inflation hovering around 5.09 percent, reflecting India’s commitment to prudent economic management.

Conclusion

Prime Minister Narendra Modi’s call for enhancing India’s economic self-reliance resonates with the nation’s aspirations for sustainable growth and stability. As India charts its path towards economic resilience, strategic reforms and prudent policies will be pivotal in realizing this vision