Reforms undertaken by India before and after the pandemic will ensure it remains one of the fastest-growing economies in the world in the decade ending 2030, finance minister Nirmala Sitharaman said on Tuesday.
In a discussion on India’s economy at an event organized by the Atlantic Council in Washington D.C., Sitharaman said India’s economic recovery has been distinct and pronounced.
“Today, we are able to get back to where we were earlier—one of the fastest-growing economies in the world. We see the decade before us, ending 2030, as a very robust decade where India would definitely continue to be one of the fastest-growing economies. I have the confidence because, whether during the pandemic or slightly earlier than that, we have taken every opportunity. During the pandemic, the challenge was converted into an opportunity and earlier, before the pandemic, it was our duty, and we undertook reforms both structural and process,” the minister said.
At another discussion on Money at a Crossroad hosted by the International Monetary Fund, Sitharaman called for a global framework to regulate cryptocurrencies, warning of the risks of money laundering and terror financing for all countries. She pointed out that no country could handle these risks alone, and these could only be regulated when countries came on board together.
“The biggest risk for all countries across the board will be the money laundering aspect and the aspect of currency being used for financing terror,” said Sitharaman. She added that the only answer was regulation.
“Regulation using technology will have to be so adept that it has to be not behind the curve, but be sure that it is on top. And that’s not possible if any one country thinks that it can handle it. It has to be across the board,” Sitharaman said at the session hosted by the IMF managing director Kristalina Georgieva.
The remarks come against the backdrop of India working on a regulation for virtual digital assets, including cryptocurrencies, with the government expected to come out with a consultation paper in the next six months. India introduced a 30% tax on crypto assets with effect from 1 April. Also, a 1% TDS on payment of virtual assets exceeding ₹10,000 in a year and taxation of such gifts in the hands of recipients will be applied from 1 July.
“How can we keep a trail following these transactions which were happening? After all, these were electronic codes eventually. So we wanted to be sure. So through that (30% tax), we will be able to know who’s buying and who is selling it,” Sitharaman said during the meeting.
Sitharaman is attending the Spring Meetings of the IMF and World Bank, G20 finance ministers and central bank governor meetings, and the Financial Action Task Force (FATF) meeting.
At the discussion organized by the Atlantic Council, Sitharaman highlighted India’s production-linked incentive schemes for 13 different sunrise sectors such as medical devices, hydrogen, solar panels and semiconductors. Sitharaman said that she would be meeting semiconductor manufacturers to attract investments into India during her US visit.
“We have incentivized investments coming to India, which would want to relocate from otherwise not-so-friendly destinations so that India can be the next manufacturing hub as an alternative to many of those which have gone into the supply-disruptive cycle. When countries go through their disruptive cycle, for whatever extraneous or internal reasons, it affects the global value chain itself. We want to be that one country where disruptions do not happen because we are more driven by the rule of law.”
She further spoke about the efforts taken towards last-mile delivery of various welfare schemes and financial inclusion. Sitharaman said the one big step the government took was not to tax people to raise resources for getting out of the pandemic.
“Our revenue to rescue the economy was not going to come out of taxing people. No ‘covid tax’ was levied on anybody,” said the minister.