India’s Finance Minister, Nirmala Sitharaman, has said that India seeks to be more involved in world supply chains and serve as an alternative to China through output-incentive plans and the growth of its domestic consumer market. Speaking at the Peterson Institute for International Economics, Sitharaman said that “production-linked incentive schemes covering 13 manufacturing sectors…are bringing in global value chains into India”. She also highlighted India’s target of hitting $2tn annually in overall exports by 2030, and the need for G20 countries to provide debt relief for more than 70 low-income nations facing a collective $326bn burden. It is true that more than half of the world’s low-income countries are at high risk of debt distress or already in it, and several have defaulted.
In 2020, the G-20 largest economies agreed on a plan called the Common Framework, which aims to facilitate the restructuring of loans for governments that can no longer afford to service or repay them. However, as of now, not a single nation has received relief under this plan. This is a cause for concern as debt distress can have severe economic and social consequences for low-income countries, including reduced access to credit, reduced government spending on essential services, and increased poverty. Nirmala Sitharaman, who assumed office as the Finance Minister of India in May 2019, is a member of the Bharatiya Janata Party and a close ally of Prime Minister Narendra Modi. She is also the first woman to hold the position of Finance Minister in India. During the COVID-19 pandemic, she played a key role in designing and implementing several social welfare programs aimed at providing relief to vulnerable sections of the society. Additionally, she has been credited with narrowing the budget gap to 5.9% of gross domestic product in the fiscal year starting April 2023 from a record 9.2% in the previous fiscal year.
