India's Most Powerful Women In Business 2023

Nirmala Sitharaman's deft handling makes India the fastest-growing big economy.

- ASHUTOSH KUMAR

#1 NIRMALA SITHARAMAN
Finance Minister

Revving Up Growth Engine

ON JULY 23, International Monetary Fund raised its 2023 growth forecast for India by 20 basis points to 6.1%. This is likely to make the country the world’s fastest-growing big economy at a time when almost all big countries are growing in low single digits amid headwinds such as runaway inflation and sky-high interest rates. This is no small achievement for the person at the helm of it all—Finance Minister Nirmala Sitharaman—who has been deftly steering the Indian economy through one of its most difficult phases in decades. After all, she inherited a slowing economy in 2019 with GDP growth touching 3.7% in FY20, only to be battered further by the pandemic (GDP shrunk 6.6% in FY21).

The seeds of India’s stellar performance over last few quarters were sown in the way Centre designed its response to Covid-19. To avoid inflation, the relief measures gave minimal demand push and instead focused on supply-side reforms (to push growth) and bringing relief to the poorest of the poor. This standout strategy was distinct from the entire western world. It spared India the scourge of runaway inflation of the kind that is breaking decades-old records in west.

Still, food and retail inflation averaged over 6% in FY23, mainly due to Russia-Ukraine war that disrupted supplies and triggered a commodity price spiral. RBI, too, started raising rates in May last year. This presented a new challenge—ensuring fast growth amid rising inflation/interest rates and restricted exports on account of global slowdown.