‘Period-defining’: Upcoming decades will see steepest rise in living standards, says FM Sitharaman

Finance Minister Nirmala Sitharaman said that the upcoming decades will be “period-defining” and will see the steepest rise in living standards of the people in the country. She added that India will double its per capita income in a “matter of a few years”. 

The minister was speaking at the 3rd Edition of the Kautilya Economic Conclave on Friday. 

“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. This is being achieved with declining inequality, as the Gini coefficient for rural India declined from 0.283 to 0.266, and for urban areas it declined from 0.363 to 0.314,” she said. For the unversed, the Gini coefficient aka the Gini ratio or Gini index represents economic, consumption, and wealth inequality in a country. 

Sitharaman said these metrics are expected to only improve from here on as the effect of the economic and structural reforms in the last 10 years are manifesting more thoroughly in the data in the coming years. She added that the Covid-19 shock is gradually fading away from the economy. 

The finance minister further stated in her address that India is seeking to double its per capita income in a matter of a few years for its population of 1.4 billion people, but highlighted the global conflicts, which might only worsen threatening global peace. 

Sitharaman said India’s “creditable economic performance” was underscored by its leapfrog from the 10th to the 5th largest economy in a matter of 5 years, and its maintained inflation. “While it took us 75 years to reach a per capita income of USD 2,730, as per IMF projections, it will take only five years to add another USD 2,000,” she said. 

While India will continue to grow, the global backdrop will no longer remain the same, she said. 

However, the advent of new technologies may “leave a more lasting impact on labour”, she said, adding that resulting economic and social impacts may be more profound than the world has experienced. Even as this is a global phenomenon, it is more acute for India considering its vast young population, highlighted the minister.

“Consumption will organically rise over the coming decade. As of now, 43 per cent of Indians are younger than 24 years old, and they have yet to explore their consumption behaviour fully. There will be organic growth in consumption as they become full-fledged consumers. Simultaneously, a rising middle class will pave the way for strong consumption, inflow of foreign investment and a vibrant marketplace,” she said.