‘Borrow To Build Assets...' - FM Sitharaman's Industry Message Has Personal Finance Mantra

Finance Minister Nirmala Sitharaman while delivering her address at Economic Policy Forum 2024 organized by the Confederation of Indian Industry (CII) emphasised the crucial importance of managing national and subnational debt with foresight, especially as countries face growing financial challenges. She acknowledged the unavoidable borrowing needed to navigate the economic fallout from the COVID-19 pandemic but stressed that long-term sustainability must be a priority.

"International debt is mounting on countries, and responsible economies cannot continue running with such large borrowings, knowing future generations will bear the burden," said Sitharaman, highlighting the need for a balanced approach to public finances. She reiterated the importance of being cautious about excessive borrowing that could leave future generations struggling with unsustainable debt.

Sitharaman further elaborated on the role of governments and industries in ensuring that borrowing is used strategically for growth, infrastructure development, and managing economic recovery, rather than for short-term relief. "In this coming decade, the priority should be to manage finances effectively, borrow for building assets, and borrow for better management, but it cannot be such borrowing that leaves the next generation wondering how they can service the debt," she added.

The Finance Minister's comments reflect a broader call for fiscal discipline and prudent financial management, urging a collective effort from both public and private sectors to ensure a financially stable and prosperous future. The emphasis on borrowing for productive assets aligns with global best practices, urging nations to invest in infrastructure and human capital while maintaining a focus on long-term fiscal health.