NEW DELHI: Finance Minister Nirmala Sitharaman on Saturday said global uncertainty is now a "standing condition" and there is a need to design policies which build resilience, and called upon nations to have an open and predictable economic relationship.
Listing out four priorities for India for dealing with the next decade of global economic shock, Sitharaman said it is now time to have "autonomy" in building resilient supply chains, and for the private sector to lead investments, including in R&D.
Sitharaman also said that the industry must play a greater role in designing and delivering training, for skill development amidst a "changing world of work".
"Uncertainty is now a standing condition of the global economy, and policy must be designed around it. We need to keep building resilience as we go along; it is not a one-time exercise. The coming years call for preparation, and India approaches them from strength," the minister said while speaking at an Economic Conclave.
Talking about open, predictable and rule-based global economic relationships, Sitharaman said nations should engage with one another through dialogue and negotiated agreements, rather than allowing geopolitical differences to become barriers to trade and investment.
"International trade policy should provide greater certainty for businesses, respect national development priorities, and avoid unnecessary restrictions that fragment markets," she said.
Stating that national security requires structural autonomy in strategic inputs, Sitharaman said focus should be on optimising supply chains to replace fragile single-source dependencies with domestic operational depth.
Sitharaman said India's expenditure on R&D stands at 0.83 per cent of GDP, compared with 2.7 per cent for the OECD, while the private sector contributes only 36 per cent of India's total R&D expenditure.
Calling for the private sector to lead the cycle of investments, Sitharaman said "raising both the scale of investment and private sector participation is essential to strengthening our innovation capacity".
The minister said for India, resilience means building upon the structural foundations laid over the past decade to accelerate and broaden growth.
"The test of the coming years will again be partly invisible: the shocks India absorbs without disruption to households and enterprises," she said.
Speaking on the theme of 'Resilience in an age of flux', Sitharaman said the evidence of resilience lies in the counterfactual, in the outcomes that did not materialise, such as an inflation spiral that did not take hold, queues that did not form at the fuel outlets, banking stress that did not surface and a fiscal correction that was never forced.
"These counterfactuals deserve as much attention from economists as the headline growth rate," she said.
Sitharaman said the Narendra Modi government has made "economic activity simpler, more predictable, and more productive across the country".
The Union government has advanced national frameworks through GST, the Insolvency and Bankruptcy Code, the four labour codes and the Jan Vishwas Acts," she said.