New Delhi: Nirmala Sitharaman said India has sufficient fiscal space to respond to global challenges and support sectors affected by the escalating crisis in West Asia, highlighting the country’s financial resilience amid global economic uncertainty.
Speaking at an event organised by the National Institute of Public Finance and Policy in New Delhi, the Finance Minister noted that the global economy is currently facing significant volatility, uncertainty and complexity. She pointed out that rising global public debt and geopolitical tensions have added further pressure on economic stability worldwide.
Sitharaman said the ongoing conflict in the Middle East has moved beyond a regional security issue and now poses a broader threat to global energy supply chains and economic stability. She added that such developments are reshaping the global order and contributing to increased geopolitical and financial uncertainty.
Despite these global challenges, she emphasised that India remains in a relatively strong fiscal position. According to the minister, India’s overall debt to GDP ratio stands at around 81 percent, which is among the lowest levels compared with several major economies.
The Finance Minister noted that many countries are currently struggling with limited fiscal capacity due to a lack of fiscal discipline in previous years. In contrast, India’s consistent approach to maintaining fiscal prudence has created room for policy flexibility during difficult global conditions.
She said the government has the capacity to continue with its capital expenditure programmes and also provide targeted support to sectors that may be impacted by external shocks. Sitharaman also indicated that the Reserve Bank of India has policy space to adjust interest rates if necessary to address emerging economic challenges.
The Monetary Policy Committee of the central bank, headed by Governor Sanjay Malhotra, began its deliberations on Monday and is expected to announce its decision on interest rates later this week.
Highlighting recent measures taken by the government, Sitharaman said India has already reduced excise duty on petrol and diesel and provided customs duty relief on certain petrochemical products to protect consumers from rising prices triggered by the West Asia crisis.
