India came through geopolitical challenges remarkably well: FM Nirmala Sitharaman hails economy's resilience

Finance minister Nirmala Sitharaman today said the Indian economy has come through the period of geopolitical challenges "remarkably well" in the last two years, and the fundamentals are intact.

Addressing the fifth Kautilya Economic Enclave in New Delhi, FM said India did not see long queues at petrol pumps or hight inflation in the wake of the West Asia crisis.

"Global public debt rose to 94% of the GDP in 2025. It is projected to reach 100% by 2029, a level seen at the time of World War II. India has come through the period remarkably well, with its fundamentals intact and strengthening," Sitharaman added.

She said the Real GDP grew 7.8% in Q1, FY27. "CPI inflation was 4.82% in August and current account deficit was 0.5% of GDP in Q1. Gross NPA of banks are at multidecadal low and foreign exchange reserves stand at $766 billion," Sitharaman said.

FM said fiscal deficit has been budgeted at 4.3% of GDP for FY27. "IMF has projected India's general government debt to decline from 83.4% of GDP in FY26 to 77.7% in 2030-31, against the rising global trend.

"Fiscal prudence gives continuity to the development commitment. It enables the state to sustain essential services and meet its obligations. The next stage is to convert the capabilities into higher productivity," she said.

Referring to the theme of the conclave, Resilience in an age of Flux, FM said India has been building the foundations ever since 2014. "The resilience being talked about now was built consciously later by layer since 2014. Since then we have worked to strengthen the capacity on which sustained development depends -- state's capacity to respond, economy's capacity to produce, and ability of the citizens and enterprises to participate in that growth," FM said.

FM outlined multiple steps taken by the government ever since the NDA government came to power in 2014. She referred to Jan Dhan Aadhar Mobile, Aayushman Bharat, entrepreneurship ecosystem, ECLGS and infrastructure creation.

In a session earlier today at the conclave, RBI Governor Sanjay Malhotra said India's financial system is stable as of now. He, however, cautioned against excessive lending and urged against risk-taking and leveraging by the banks. But he also clarified that there are no signs of stress as of now.

Malhotra said a prolonged period of financial stability, which the Indian economy has been witnessing, leads to risk-taking and must be avoided.