Next generation reforms to get policy wheels: Nirmala Sitharaman

Finance minister Nirmala Sitharaman Tuesday said India intends to introduce and incentivise next-generation reforms spanning various factors of production such as land, labour, capital and entrepreneurship to further support growth. She said the government will soon firm up an economic policy framework to make it a reality.The government will focus on technology “as an enabler of improving total factor productivity and bridging inequality”, she said.

Sitharaman said: “Our government will initiate and incentivise reforms for improving productivity of factors of production, and facilitating markets and sectors to become more efficient”.

The reforms will be undertaken in close collaboration with states, she said, indicating that the path to structural reforms will be shaped by cooperative federalism.

“Effective implementation of several of these reforms requires collaboration between the Centre and the states and building consensus, as development of the country lies in development of the states,” she said.

India Ratings chief economist DK Pant said: “The promised reforms will aid in improving productivity across sectors, which will help catapult the economy to a sustained high-growth trajectory.”

The economy grew at a higher-than-anticipated pace of 8.2% in the last fiscal year.

The International Monetary Fund (IMF) has forecast India will remain the world’s fastest-growing major economy in the current fiscal year and the next, with rates of expansion touching 7% and 6.5%, respectively, more than double the global average.

The Economic Survey on Monday pegged the FY25 growth rate at 6.5-7%, while the central bank has forecast it at 7%.