Union Finance Minister Nirmala Sitharaman addresses the third edition of Kautilya Economic Conclave. October 4, 2024
| Photo Credit: PTI

Finance Minister Nirmala Sitharaman on Friday (October 4, 2024) said India would achieve near doubling of per capita income in the next five years and witness the steepest rise in living standard of the common man in coming decades aided by structural reforms undertaken by the government in the last 10 years.

Addressing the 3rd edition of Kautiliya Economic Conclave in New Delhi, the Minister said, India’s critical economic performance in the recent decade was underscored by its leapfrog from the 10th to the fifth largest economy in a matter of five years.

“While it took us 75 years to reach a per capita income of $2,730, as per IMF projections, it will take only five years to add another $2,000. The upcoming decades will see the steepest rise in living standards for the common man, truly making it a period-defining era for an Indian to live in,” she said.

She added India seeks to double its per capita income in a matter of a few years for its 1.4 billion strong population (which makes up 18 % of the global total) in a fragmented and fractured world where several persistent conflicts may worsen, posing a threat to global peace that is the bedrock of prosperity.

This is being achieved with declining inequality, as the Gini coefficient (income inequality benchmark) for rural India declined from 0.283 to 0.266, and for urban areas it declined from 0.363 to 0.314, she said.

“I expect these improvements to continue as the effects of the last ten years of economic and structural reforms manifest more thoroughly in the data in the coming years as the Covid shock fades from the economy,” she said.

By 2047, as India crosses the 100-year mark of independence, she said, the new Indian era will have core characteristics similar to developed countries.

Viksit Bharat will usher prosperity not just to Indians but to the rest of the world by becoming central to a vibrant exchange of ideas, technology, and culture, she added.

Speaking on the country’s financial system she said the soundness and resilience of India’s banking sector have been underpinned by a sustained policy focus on asset quality improvements, enhanced provisioning for bad loans, sustained capital adequacy, and a rise in profitability.

NPA (non-performing asset) ratios are at a multi-year low, and banks now have efficient debt recovery mechanisms.

Ensuring that the financial system stays healthy and the cycle lasts longer is another of our core policy priorities, the minister said.