‘Scale and Spread’ - FM Nirmala Sitharaman's Key To Leveraging India’s Youth Population

True economic success is not just about production but also ensuring the widespread distribution of benefits, especially in countries like India with large, youthful populations, Finance Minister Nirmala Sitharaman said, while addressing the Global Economic Policy Forum 2024 organised by the Confederation of Indian Industry (CII) on Wednesday emphasised the need for a balanced approach to economic growth, combining the scale of large enterprises with the reach of small and medium-sized businesses.

“We need to have a blend of large scale and small for the horizontal scale and when I say the horizontal scale, you cannot have one unit established in one place and produce with efficiency with scale, but they can only generate certain numbers of jobs,” Sitharaman added.  Sitharaman noted that “scale cannot be just the criterion” for economic success. While large corporations bring efficiency, “there is also a need for spread,” she argued. She pointed out that India’s demographic strength lies in its small and medium-sized enterprises, which need to be integrated with large enterprises to maximize the potential of the country’s young workforce. “Unless we spread across the country, you are just not going to reap the benefits of your demographic dividends,” she stressed.

She also added that the decadal priority is that industry should work together with small and medium units to see how they can support 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 waiting for jobs and wages,” she opined.  The Finance Minister also addressed global challenges, particularly inflation and geopolitical instability. She stated, “War should be avoided. Disruption should be avoided. They are the main causes of supply chain disruptions,” noting that “inflation does not respect borders” and affects all countries.

Sitharaman also discussed the critical need for climate resilience. “Extreme weather events are taking away the hard-earned resources of the poor,” she said, urging the creation of more resilient infrastructure and innovation in agriculture to ensure food security amid changing climate conditions. In closing, Sitharaman called for industries to collaborate with small and medium enterprises to foster job creation and economic inclusivity. “Economic success should also spread benefits for those waiting for jobs and wages,” she concluded, highlighting the role of technology in facilitating this growth.