The Cost of War and the Need for Normalcy
Union Finance Minister Nirmala Sitharaman emphasized the urgent need to restore normalcy in the world, highlighting the detrimental impact of war on global supply chains and inflation. Speaking at the Global Economic Policy Forum 2024, she stressed that skirmishes and wars are unjustifiable and should be avoided at all costs.
"The first effort, I think, the global priority for this decade, should be to restore normalcy. Talk, sit and discuss. War should be avoided. Disruption should be avoided," she stated.
Sitharaman underscored the collective responsibility of industry, government, policymakers, citizens, and citizen forums in restoring global normalcy. She identified wars as the primary cause of supply chain disruptions and food value chain disruptions, leading to the current global inflation crisis.
"They (wars) are the main cause for supply chain disruptions. They are the main cause for disruptions in food value chains," she said, emphasizing that inflation is a borderless challenge that no country can tackle alone.
The minister acknowledged the need for industry to realign its policies with the country's political and strategic decisions. She advocated for blending economic priorities with political and strategic needs to address supply chain disruptions.
Sitharaman also urged the industry to collaborate with small and medium units, supporting their growth and job creation. She emphasized that economic success should not be limited to production but should also encompass the creation of jobs and opportunities for those seeking employment.
Furthermore, the finance minister highlighted the importance of responsible borrowing and debt management for countries. She expressed concern about the mounting intergenerational debt burden and stressed the need for responsible economic management.
"Responsible economies can't be run with borrowings so large that the next generation and generation after that already knows what it is liable to repay that…,” she said, advocating for prioritizing financial management and borrowing for asset building.
While acknowledging India's increased borrowing during the Covid-19 pandemic, Sitharaman assured that the government remained mindful of avoiding unsustainable debt burdens on future generations.