Funds to flow back, growth on track as PM Modi–Trump call boosts investor confidence, says Nirmala Sitharaman

Finance Minister Nirmala Sitharaman has struck an upbeat but measured note on India’s economic trajectory, signaling an expected turnaround in foreign fund inflows following a recent call between Prime Minister Narendra Modi and the US President, while firmly defending the government’s growth projections, capex strategy, and fiscal discipline.

Rejecting suggestions that the Budget’s projected 10% nominal GDP growth is conservative, Sitharaman said the estimates are “realistic” and grounded in achievable targets. “We have neither overshot nor underplayed our numbers. Every year, we are accused of conservatism, but we consistently meet what we set out to do,” she said, underlining that inflation expectations are already built into the projections.

The Finance Minister in an interview with The Indian Express pointed to early signs of revival in private sector investment, noting a gradual shift away from passive, low-risk income avenues towards capacity expansion and new ventures — particularly in emerging and frontier sectors. While traditional core industries continue to matter, she said the momentum is visibly moving towards newer areas of growth and innovation.

On the government’s sustained emphasis on capital expenditure, Sitharaman dismissed concerns over weak execution, calling implementation one of the administration’s strongest credentials. She highlighted Prime Minister Modi’s direct oversight of last-mile delivery through monthly PRAGATI meetings, where district-level bottlenecks are reviewed and resolved. “Reaching the last mile and delivering outcomes is a signature feature of this government,” she said, while acknowledging that delays sometimes arise from states that are politically reluctant to align with central schemes.

Addressing perceptions that global investors are pulling back, Sitharaman noted strong interest from sovereign and pension funds in countries such as Norway and Canada, even as some large North American fund managers remain cautious. She observed that Indian markets and the rupee have recovered some lost ground following the PM Modi–US President conversation, adding, “My sense is that this call could change the direction of fund flows. I expect capital to move towards India.”

While conceding that uncertainty over India–US ties may have been a contributing factor, she stressed it was not the sole reason behind recent volatility. Strong macro fundamentals, rating upgrades by multiple agencies, and resilient economic indicators, she argued, continue to make India an attractive destination.

On competition and market concentration, Sitharaman said regulators are actively vigilant. Referring to recent scrutiny of dominant players in aviation, cement, and infrastructure, she emphasized that the Competition Commission of India has full authority to act suo motu against monopolistic or collusive practices.

Turning to technology and employment, the Finance Minister rejected alarmist narratives around artificial intelligence. “India needs solutions, not fear,” she said, stressing that AI must be viewed as a tool to address real-world problems rather than solely through the lens of job displacement. The government’s focus, she added, is on skilling tailored to sector-specific needs—from agriculture and construction to manufacturing and tool rooms.

Sitharaman also defended the creation of an infrastructure risk fund, framing it as a support mechanism for MSMEs seeking to modernize, adopt advanced technologies, or upskill their workforce. The objective, she said, is clear: “Grow big, grow modern, and use technology—and know that the government will back you with funds if required.”

On fiscal federalism, she reiterated the Centre’s firm stance on state borrowing within FRBM limits, warning against debt-funded populism that burdens future generations. While Article 293 empowers the Centre to monitor state debt, she said the approach has combined discipline with flexibility, including debt restructuring support for states willing to reduce high-cost liabilities.

Finally, addressing persistently high fertilizer subsidies, Sitharaman said reforms hinge on building a robust, interoperable data ecosystem linking farmer profiles, land records, and fertilizer usage through the Digital AgriStack. Until traceability, duplication, and targeting issues are resolved, she cautioned, sweeping subsidy reforms would remain premature.

Taken together, Sitharaman’s remarks underline a government confident in its growth strategy, firm on fiscal prudence, and optimistic that geopolitical signals—particularly from Washington—could soon translate into renewed capital flows for the Indian economy.