Threat to global peace a challenge for economic revival: FM Sitharaman

Finance Minister Nirmala Sitharaman said on Friday that global peace was necessary for all countries, including India, to recover from the pandemic-induced economic slowdown. Speaking at the Asia Economic Dialogue, the FM said she hoped for peace to be restored soon in Europe so that global economic recovery could take place in a sustained manner.

"Peace is being threatened today. At a time when global value chain is so integrated, India's development is going to be challenged by newer challenges emanating in the world. No one country can plan its recovery alone," Sitharaman said.

A war of this impact on the globe has not been seen since the World War-II, the FM said, while expressing hope for restoration of peace at the earliest.

The finance minister's comments came as Russian forces encircled Ukraine's capital Kiev. While the militaries intensified the fight, the Russian government said it would send send representatives to Ukraine to hold talks.

On Friday, crude oil prices came down to just below $100 a barrel as the United States and European Union kept petroleum out of the sanctions imposed on Russia. A day earlier, it had breached the $100 mark for the first time in eight years as Russia attacked Ukraine.

If global commodity prices remain at an elevated level for a prolonged period, a number of assumptions made by the government and the Reserve Bank of India for FY23, like retail inflation and GDP deflator, can be upended.

Speaking on other issues, Sitharaman said that there are three planks on which the government is focusing on as India heads towards 100 years of independence in 2047. These are transition to clean energy, capacity building through infrastructure, health and education.

"Transition to cleaner sources of energy is an important plank for us and it will feature in every budget. The older thermal plants will have to be converted to produce electricity from cleaner sources," she said.

The FM said that focus is on expanding physical as well as digital infrastructure so that jobs and opportunities can be created for India's youth. The Union Budget 2022 has provided the largest ever capital expenditure outlay at Rs 7.5 trillion for FY23, although Rs 1 trillion out of this is in the form of long- term loan to states to support capex needs.

"The third element I will put money into is health and education," Sitharaman said, adding that success of all these three planks required seamless coordination between the Centre and states.