Calling for higher investment in technology, including artificial intelligence, Union Finance Minister Nirmala Sitharaman on Saturday said India could achieve economic growth of more than 10% if these sectors contributed more to the economy.
“Going forward, the next large investments in India’s infrastructure must focus heavily on AI, semiconductor chips and quantum computing,” she said, speaking at a fireside chat at the IIT Madras Alumni Association’s annual conference in Bengaluru. “Our MSMEs, which produce everything from basic components to aircraft parts, need AI solutions to improve productivity and compete globally.”
Countries that already have a big lead in AI are the ones asking others to slow down, she said, while India is still training and skilling its people. “Despite the chorus for slowing down the speed with which innovators are coming up in the AI field, we still need a lot more investment for India,” she said.
She also rejected the view, largely held by foreign media, that India has missed the AI bus. Critics say so because India has no listed AI companies, she said, even though some AI startups have become unicorns. She urged investors backing these startups to consider taking them public. “Listing brings its own advantages,” she said, adding that founders in the space should be freed from worrying about making money.
She said India can achieve economic growth of more than 10%, but stressed that sustaining a faster pace will require technology and startup-led innovation to move beyond the technology sector and into traditional parts of the economy. “It is possible to reach 10-plus growth. And I’m not just saying it to pep you all up,” she said.
Sitharaman said startups, which have grown rapidly since 2014, could in the next couple of years contribute as much to the economy as traditional industries. “India’s transformation has been driven by sustained efforts to clean up institutions, restore confidence, and open sectors to private participation, while creating policies that enable young people, entrepreneurs, and innovators to contribute to growth,” she said.
Sitharaman cited the space sector as a ‘strong example’, with Indian startups now designing and building satellites and undertaking space missions. Sitharaman said the next phase of growth would depend on such innovations reaching sectors with large productivity gaps.
In agriculture, she cited drones and aerial geospatial instruments for precision mapping of land parcels, as well as technology aimed at improving harvesting and land preparation. She also referred to pilot testing of point-of-sale machines in fertiliser distribution. Such systems can record details of the farmer, land and crop and provide information on the quantity of fertiliser that may be sufficient based on the crop, soil and irrigation available. “The sooner these technologies reach these sectors, the better it is for India,” she said, adding that optimal use of resources would contribute to growth.
Sitharaman attributed India’s economic transformation over the past decade to a combination of policy changes, institutional reforms and opening up sectors to private participation. She said the government had focused on restoring confidence in banks and institutions, cleaning up stressed assets and consulting stakeholders before changing policies.
She cited the government’s public sector enterprises policy as an example of this approach, saying private participation had subsequently been opened up even in strategic sectors where it had previously been restricted.
The minister also said the country needed to overcome excessive scepticism about its economic prospects. “We have too many naysayers,” she said, arguing that a more positive environment was necessary for India to accelerate growth.