'Will shield vulnerable sections from price pain, says Finance Minister Nirmala Sitharaman

Mumbai: Finance minister Nirmala Sitharaman underscored the government's resolve to cushion vulnerable sections, such as farmers, from a surge in input costs in the wake of the West Asia conflict, just as it did during the pandemic, without upsetting the fiscal glide path.

The Centre aims to contain its FY27 fiscal deficit at 4.5% of GDP.

Addressing an audience of corporate bosses and top officials at the Economic Times Awards for Corporate Excellence in Mumbai on Saturday, she called on India Inc to invest in the economy and called attention to the threats and promise of artificial intelligence.


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Sitharaman wondered what was holding industry back from capacity expansion, pledging a patient hearing and remedial measures. "We are certainly willing to hear any difficulty that stops Indian industry from expansion or capacity building or investing in newer technologies, AI," she said. "Tell us what you (industry) need. Tell us what you want us to do, so that you feel incentivised to further invest and grow equally."

India imports a large volume of finished and intermediate goods, which reflects the scope the country offers for its own companies to manufacture these products at home and reduce reliance on imports, she stressed.

‘Door Open for Reforms

Strong macroeconomic fundamentals should ideally — but not necessarily — result in huge foreign investment inflows, the minister said, pointing at other considerations that investors may have when they pull out.

Experts had earlier said many investors were withdrawing to book profits, and could return later. Of late, some have pointed at renewed strategic considerations of foreign investors in the aftermath of the additional US tariffs on India.

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“There are other considerations (for capital outflows). And we can always flag ourselves or flog ourselves and say, more reforms are required,” the minister said, indicating the need for a free and more nuanced discussion on capital outflows.

She said India was ready for reforms and various government departments are already working on fresh initiatives under the direction of the Prime Minister to make it easier to invest, operate and manufacture in India.

“Under this Prime Minister, there is never a shut door when it comes to reforms,” she said.

The finance minister said domestic consumption has given India shock-absorbing capacity against various crises. “So as long as we are not going to fail in keeping consumption boosted and well supported we can be sure to weather the storm,” she said.

Anthropic, Mythos

Sitharaman said the Ministry of Electronics and Information Technology has been engaging with the US administration and Anthropic on risks associated with the latter’s Claude Mythos, an advanced artificial intelligence model, emphasising the ways in which AI could be disruptive.

Anthropic is also finding out ways to resolve the issue, she indicated.

The US company says Mythos is so powerful that it has restricted its release to 40 tech and finance companies under the so-called Project Glasswing. The model can outperform humans at cybersecurity tasks such as uncovering zero-day vulnerabilities, according to Anthropic, sparking global discussions over the dangers it could pose to digital services.

On Thursday, Sitharaman had urged banks to bolster cybersecurity systems and adopt a more proactive approach to tackle emerging threats linked to AI models. The minister said the strategic sale of IDBI Bank will take place. It had entered an uncertain phase as financial bids for the lender were lower than the floor price set by the government. “There is no halting. It will happen,” she said.