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INDIA

Nirmala Sitharaman Reappointed as India’s Finance Minister: Modi 3.0 Cabinet

Sitharaman will now be gearing up for her 7th Budget, widely expected to be presented next month.

Nirmala Sitharaman has been reappointed as India’s finance minister in Prime Minister Narendra Modi’s government in 2024.

Her return to the finance ministry follows days of speculation about a potential portfolio change for India’s first full-time female finance minister.

Sitharaman, serving as a union minister in the Modi-led cabinets in 2014 and 2019, is now a member of the new Council of Ministers for the third time.

Before taking charge of the finance ministry in May 2019, she held positions as the commerce and defence minister.

Sitharaman is credited with guiding the Indian economy through the challenges posed by the pandemic and positioning the country to be the fastest-growing major economy, even during global recessionary fears.

In the recent cabinet announcement, Ashwini Vaishnaw will lead the railway ministry, focusing on safety and punctuality. At the same time, Nitin Gadkari will retain the road ministry as the longest-serving cabinet minister under the Modi government.

India, now the world’s fifth-largest economy, has displayed resilience compared to developed nations. During January-March 2024, India registered a GDP growth of 7.8%, with the full-year figure expected to be above 8% for FY24.

Sitharaman is now preparing for her 7th Budget, scheduled to be presented next month.

All eyes will be on the full Union Budget for 2024-25, as it’s expected to address India’s weaker rural growth and consumption levels.

The focus is on balancing continued fiscal consolidation and measures to strengthen the economy, especially given the current government’s need for a majority in its third term.

The government has set the fiscal deficit target at 5.1% of the GDP, prioritizing higher capital expenditures with a record allocation of Rs 11.1 lakh crore for FY25.

Sitharaman’s reappointment signals policy continuity, and it’s anticipated to see whether the government will use the substantial dividend from the central bank for more aggressive fiscal consolidation or partly deploy it for consumption-boosting measures.

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