War and disruption should be avoided, global priority to restore normalcy: FM Sitharaman

Union Finance Minister Nirmala Sitharaman on Wednesday underlined the need to restore normalcy in the world and highlighted the cost of war that has caused supply chain disruptions and higher inflation globally.

“No way can there be enough justifiable reason for skirmishes or war. The first effort, I think, the global priority for this decade, should be to restore normalcy. Talk, sit and discuss. War should be avoided. Disruption should be avoided,” she said at the Global Economic Policy Forum 2024 organised by CII.

The minister further underlined that it is incumbent upon everyone, including the industry, government, policymakers, citizens and citizens’ forums to try to restore normalcy across the world.
“They (wars) are the main cause for supply chain disruptions. They are the main cause for disruptions in food value chains,” she said while underlining that inflation is the biggest challenge globally that doesn’t “respect borders” and no country can tackle it alone.

“The primary cause, I would think, is the disruption, the skirmish, the war, and as a result, the world is facing a challenge which is reflected in many ways in our economies,” the minister said.

She also noted that the industry will have to realign its policies keeping in mind political and strategic decisions of the country. To tackle supply chain disruptions, Sitharaman said currently there is a need to blend economic priorities with politics and strategic needs.

She also urged the industry to work together with small and medium units to see how they can be supportive of the large units equally as much as they support job creation. “Today, the problem is not economic success, which is just production, but it is also economic success which can spread benefits for those who are waiting for jobs and wages,” she said, adding that it will be made easy through technology.

The finance minister also stressed that another decadal priority has to be for countries to be responsible about borrowing and managing their debt. “Intergenerational debt is mounting on countries... Responsible economies can't be run with borrowings so large that the next generation and generation after that already knows what it is liable to repay that…,” she said, adding that the priority should be to manage finances and borrow for building assets.

While India too borrowed more during the Covid-19 pandemic, she said that the government remained “super conscious” about the fact that it cannot burden the forthcoming generations with debt that is not sustainable.