It is a great honor to be here today at the IMA National Leadership Conclave in New Delhi. I would like to thank IMA and the distinguished award selection jury for conferring upon me the Public Service Excellence Award. As I have said a little while ago, I accept this recognition with humility and a profound sense of gratitude, fully mindful that over the years whatever public service I have done reflects the collective efforts of many rather than that of an individual. I would also like to compliment and convey my congratulations to Sri K. Kamat and ISRO for winning their respective awards. We are proud of your achievements.
Since its establishment in 1957, the IMA has emerged as a key policy advocacy platform serving as a bridge between industry, government and academia through consultations and dialogues, in normal times and more so in times of severe stress as we are experiencing now due to multiple global factors. It is the quality and capacity of management and governance that makes a critical difference and enables institutions and businesses to not only survive but also come out stronger. These are testing times. Managements and institutions which navigate these testing times, I think that is the true strength of any management. It is heartening to note that IMA is championing the management profession with such dedication.
In September 2021 when I had last addressed IMA, and that was during the COVID pandemic period and it was a video event, I had addressed the IMA through video conference facility. So that was in September 2021. That time the world was grappling with the deep scars left by the COVID-19 pandemic. What began as a once-in-a-century public health emergency had swiftly transformed into an unprecedented humanitarian and economic crisis. Countries across the world had to navigate fragile recoveries after prolonged lockdowns, disrupted supply chains, subdued consumer demand and strained public finances.
In the aftermath of the pandemic, a series of severe supply side shocks, most notably the war in Ukraine, the tariff induced uncertainties and the conflict in West Asia have disrupted global production networks, logistics systems and labor markets. Each shock arrived before the wounds of the previous had fully healed. And yet through each crisis, India has not merely survived. It has in fact emerged remarkably and measurably stronger. We are in the midst of another crisis with the impact of the war in the Gulf. In this background, I have chosen to speak on the theme 'Turning Turbulence into Triumph: India's Journey Through Crisis.' I propose to reflect on some of the crucial learnings from our experience especially in the last few years, how we have navigated the multiple crises starting with the COVID-19, and I would like to therefore highlight on some of the crucial learnings from our experience in the recent years and how it offers valuable insights for enhancing resilience in an increasingly volatile and fragmented world.
Today, the global economy is navigating a highly unsettled and charged environment marked by geopolitical fragmentation, shifting supply chains, and uneven regional growth. Multilateral institutions such as the International Monetary Fund, that is the IMF, have repeatedly warned that the balance of risks to global growth outlook remains decisively skewed to the downside. These vulnerabilities are further intensified by the prospect of tightening financial conditions as elevated public debt and widening fiscal deficits constrain policy space in several major economies. In fact, they carry the potential for future financial shocks.
In the face of global volatility, India has displayed remarkable resilience with its real GDP growing by 7.6% in the financial year we just concluded, that is financial year 2025-26. I would like to stress that India's resilience does not alone explain the full story. In the last 5 years since COVID-19, India did not just endure the period of turbulence. It transformed through it. The country witnessed deep digitalization across sectors, efficiency gains in government systems and unprecedented expansion in infrastructure. From 2021-22 to 2025-26, India has recorded an average annual real GDP growth of 7.8%, reflecting economic resilience and resurgence.
The question that merits an answer at this stage is what are the key factors behind this growth story of the Indian economy? Let me elaborate. First, macroeconomic stability. India has maintained strong growth, unwavering management of inflation and large foreign exchange reserves making it well equipped to absorb global shocks. Second, and I am going to highlight 10 points, so I need your patience. First was the macroeconomic stability. Second, policy stability. Stable governance and broad policy focus on growth and reforms have given confidence to investors and businesses. Third, infrastructure-led development. Sustained public investment in roads, ports, railways, energy and digital systems has strengthened supply chains and reduced structural bottlenecks.
Fourth, strong domestic demand. With a median age of 29 years and a rapidly urbanizing population, India's consumption base provides a natural buffer unavailable to many export dependent peers. India's consumer spending accounts for over 55% of its GDP. Fifth, monetary policy credibility, an issue which is very close to my heart. The Reserve Bank's inflation targeting framework allows policy rate to respond flexibly. Cutting repo rates, that is interest rates what you call in popular parlance, but cutting repo rates when growth is threatened and tightening the repo rates when inflation surges, and all this is done with big emphasis on not sacrificing long-term market confidence and growth.
The GDP growth of 7.1% in 2024-25 bears testimony to this and in fact completely demolishes the narrative in certain quarters at that time that the Reserve Bank's monetary policy has resulted in growth slowdown. Continuity in this flexible monetary policy framework for the next 5 years, that is till 2031, reaffirms the commitment to price stability while keeping in mind the objective of growth. Now many people often have asked me why is inflation management so important. You see, inflation if it remains at a stable level it gives big confidence to investors as well as markets and inflation, many economists have described inflation as a tax on the poor because the biggest sufferers if inflation is high are the poor people. And one more thing which is very important is that a low inflation would mean increasing the spending power, the real money in the hands of the consumer and therefore inflation control is in the overall interest of the economy, in the interest of industry, in the interest of investors and above all in the interest of the people.
Sixth, digital public infrastructure. UPI, about which already mention has been made by the honorable minister, UPI, Aadhaar, ONDC and progressive formalization of the economy through multiple measures like the introduction of the GST have expanded financial inclusion and improved fiscal revenue and monetary policy transmission. Thus, each crisis in recent years has become a catalyst for structural deepening. Seventh, fiscal discipline. Despite extraordinary spending pressures especially during the COVID-19 pandemic, India has adhered to a credible path of fiscal consolidation. A credible fiscal framework is not just an accounting exercise. It is the bedrock of national resilience. A defining feature of this fiscal consolidation in India has been the marked improvement in the quality of our public expenditure with sharp rise in the share of capital expenditure within the total spending of the government.
Eighth, resilient financial system. The banking and the NBFC, that is non-banking financial companies, sector emerged stronger in the aftermath of the pandemic than when the pandemic began thanks to the efforts of the regulator and other stakeholders. Ninth, young and enterprising demography. Young and skilled demographic profile of India is a powerful economic advantage driven by large working age population, rising educational attainment and expanding digital capabilities. Coupled with enterprising energy, this workforce will continue to boost productivity, innovation and inclusive growth in the years to come. Tenth and the last, there is a final point, geopolitical positioning. India's strategic autonomy and diversified partnerships reduce overdependence on any single country or group of countries. We take decisions in our best national interest.
Now these features of the Indian economy enable us to face recurring global shocks as we have seen in the last few years. These features also enable the economy to emerge even stronger after each crisis. You see it is often not recognized, and let me put it positively. If you just imagine the crisis which we have gone through, crisis after crisis, and compare where we stand today, where our economy stands today, with a large number of other countries, I think that demonstrates the kind of resilience which we have shown together as a country. The credit for this goes to the people of India, the Indian business and of course to the government of India.
Now the nimble yet prudent responses of our policy makers have helped us in managing all these crises one after the other so well. What was unique about India, and this is very important, what was unique about India throughout this period of multiple crises was that fiscal and monetary expansion were followed by timely roll back of such expansion. Thus froth was not allowed to accumulate or overrun the system. You know in any crisis we have seen across the world the fiscal authorities, that is the governments, the finance ministries across various economies or the central banks, they immediately come out with large number of stimulus measures. If it is the central bank it comes out with interest rate reductions pumping liquidity in the system. Now all that is very easy but to withdraw that is the real challenge. It is like the Chakravyuh. In a crisis you are entering a Chakravyuh. Now if you do not know the exit route then the economy gets stuck and you will create bigger problems than the problems you began to tackle.
So therefore I think in India what was unique was that the fiscal expansion, the stimulus measures which government provided were targeted and they were also gradually withdrawn. And similarly with regard to the monetary policy, the liquidity that the RBI injected or the rate reductions that the RBI did, all these expansionary measures were announced with a certain sunset date, with a closing date that this facility is available for this particular time and therefore it automatically it was rolled back. Now the Reserve Bank took during the pandemic more than 100 measures to mitigate its impact but almost each of these measures were for a limited period and was rolled back in time. As I said in parallel, there were several initiatives from the government relating to health, supply chain augmentation, fiscal support and other such measures which were timely and well targeted.
Again, after the sharp increase in inflation following the Russia-Ukraine conflict, the Reserve Bank raised interest rates by 250 basis points to tame inflation. The benefits of which we are reaping now in terms of low inflation, even though several large economies even now are facing stubborn inflation. Now added to all these features which I have just narrated, the nine points and the way I have elaborated, added to these features which I just highlighted, India's resilience and sustained growth is also a result of several painstaking structural reforms. These reforms have been proactive and forward-looking. We have undertaken structural reforms such as the implementation of the inflation targeting framework, the goods and services tax GST, the insolvency and bankruptcy code, the recapitalization of public sector banks, RERA, India's digital stack and several other such measures. The details of these reforms are well known and there is perhaps no need for me to elaborate on their content and outcome.
When we talk about India's resilience, we cannot leave out the underlying theme of our policy approach namely self-reliance or Atmanirbhar. Over the years and across the world, firms have sometimes optimized efficiency through single source supply chains. Some countries have even optimized growth through hyper globalization. But in today's world of geoeconomic fragmentation and supply chain disruption, the world of corner solution, I repeat, the world of corner solution is perhaps becoming less efficient. Now a corner solution as many of you would know occurs when the optimal choice lies at the boundary of feasible options. Or let me put it in more simpler language. It basically implies allocating all resources to one alternative and none to others. Prime examples are over reliance on a single source of production or just-in-time supply chains which were, you know, which are still looked at with a lot of confidence. But in today's world there are questions raised whether we are able to maintain just-in-time supply chains.
Now as I said in today's world of fragmentation, the corner solution is perhaps becoming less efficient. It is now evident that resilience on one dominant partner creates vulnerability not efficiency. No country or single supply chain remains the cheapest, safest or the most predictable on a sustained basis. Supply chain shocks challenge the logic of single source optimization. In fact, resilience maximization is replacing cost minimization as the priority of today. I repeat, resilience maximization is replacing cost minimization as the priority of today. Resilience maximization can indeed be highly cost effective in the long run. Optimal strategies require diversification, not concentration. Robustness matters more in the long run than short-run efficiency. Flexibility beats single point optimization.
In this reality of multiple global shocks in the past 5 years, including the current West Asian crisis, India is trying to achieve its growth objective through a policy of strategic self-reliance or Atmanirbhar Bharat. India's approach to Atmanirbhar Bharat reflects a strategic commitment to self-reliance shaped by realism not isolation, anchored in both economic and external policy. It seeks to build domestic capacity in critical goods and technologies while reducing dependency on single external source. As the honorable prime minister has articulated, Atmanirbhar Bharat is outward-looking and capacity-driven, enabling India to engage globally from a position of strength. It rests on two mutually reinforcing pillars, economic self-reliance and geopolitical autonomy. Together they enhance India's resilience, sustain its growth and position it as a confident global partner, contributing constructively to global prosperity.
Policy initiatives under the ambit of strategic self-reliance have yielded results. The country is entering a phase where strategic sectors notably electronics manufacturing, semiconductors, pharmaceuticals, global capability centers and digital technologies among others are fast emerging as powerful engines of job creation, investment and innovation. India's electronics manufacturing has undergone a dramatic transformation evolving from a heavily import dependent market to one of world's fastest growing hubs. Mobile manufacturing, as the honorable minister pointed out, mobile manufacturing units have grown from just two in 2014 to over 300 today. India is now the world's second largest mobile phone producer driven by Make in India and PLI schemes. Near self-reliance has been achieved with mobile exports surging to rupees 2 lakh crore in 2024-25.
Progress in semiconductors also marks an equally strategic shift. In response to globally concentrated and fragile supply chains, the India Semiconductor Mission launched in 2021 has started yielding results with approved projects worth rupees 1.6 lakh crore across six states. Production from two semiconductor plants has already commenced with two more plants expected to start commercial production this year. Building on this success, India Semiconductor Mission 2.0 was announced in the Union Budget 2026-27 with focus on producing semiconductor equipment and materials in India, designing full stack Indian semiconductor intellectual property and fortifying both domestic and global supply chains. The momentum reflects a move from policy ambition to production readiness.
Similarly, India's rise in the pharmaceutical sector over the years and especially in the past decade has been nothing short of transformational. Today, India stands as the third largest pharmaceutical producer globally by volume and a trusted pillar of global health security supplying affordable high-quality medicines to many countries. At the heart of India's global reputation as the pharmacy of the world lies its unmatched generics ecosystem producing 20% of global generic medicines. India is also a critical force in global vaccine security. India's pharmaceutical exports have surged to US dollar 30.5 billion marking a 16-fold increase since the turn of the century. Looking ahead, initiatives such as BioPharma Shakti aim to position India as a global biopharmaceutical manufacturing hub, strengthening supply chain resilience and driving next generation innovation.
India's global capability centers, GCCs, have entered a new era defined not by cost arbitrage but by ambition, innovation and global ownership. India's deep talent pool with over 1.9 million professionals employed in GCCs across engineering, artificial intelligence, product development and digital operations has elevated GCCs from support functions to centers that co-own global mandates and drive enterprise transformation. What makes India's GCC story truly powerful is its evolution into a multi-city network in tier 2 and tier 3 cities attracting new GCCs supported by infrastructure incentives and untapped talent pool.
The 21st century foundational infrastructure is no longer physical infrastructure alone but digital public infrastructure. For long we understood infrastructure in terms of ports, roads, railways, all that is very important no doubt, but in the 21st century digital public infrastructure has also become a completely new dimension and a very critical dimension of infrastructure. And in this particular context I would like to refer to the globally admired India Stack. It has redefined how technology can empower citizens at scale and with inclusion. Built over 57 crore Jan Dhan accounts and platforms like the UPI and Aadhaar. The next phase of financial inclusion focuses on frictionless access using tools such as voice-based and assisted digital interfaces to enable transformations even without smartphones or high-speed internet. This is opportunity truly democratized. India's digital economy is projected to contribute close to 20% of our GDP by the year 2030. Driving this shift is the India AI Mission with the objective of creating a large sovereign AI and compute backbone which will enable Indian startups, researchers and institutions to innovate at scale, securely and independently.
As India's economic strength grows, so must its security. India's Atmanirbhar in defense aims to achieve strategic autonomy by strengthening indigenous design, development and manufacturing of military equipment driven by initiatives such as Make in India, defense acquisition reforms in defense acquisition procedure, FDI liberalization and creation of defense industrial corridors. The overall policy has encouraged public sector units, private industry and startups to collaborate on advanced platforms, weapons and technologies. While indigenously developed systems reflect growing domestic capabilities, rising defense exports demonstrate global confidence in Indian products.
I now turn to energy security. And I hope what I am saying is making some sense because I find, okay thank you. Now the recent hostilities in the Gulf combined with blockade of the Strait of Hormuz has revived memories of demand destruction and severe supply side disruption of the times of COVID. Energy prices have surged spilling over into transport, manufacturing, fertilizer and food costs. The global economy now faces a sudden systemic shock originating from an area which is at the core of global energy and critical input supply. The West Asia crisis highlights the importance of energy security and self-reliance. Over the last decade, India has made gains in energy security. Power sector reforms have addressed long-standing inefficiencies through tariff rationalization, distribution restructuring and financial discipline. Electricity is now central to India's ambition in manufacturing, services and urban development. Power availability has shifted from being a constraint to an enabler of productivity, competitiveness and digitalization.
In the current decade of the 2020s, peak power deficit in India has come down to less than 0.5% as compared with 5 to 10% average peak power deficit which was recorded in the previous decade, that is in the 2010s, that is from 2010-11 to 2019-20. India has expanded its electricity generation capacity significantly over the last decade. Installed capacity at 524 gigawatt in February 2026 has more than doubled over the decade. Large scale investments in transmission and distribution infrastructure have improved grid reliability and reduced regional disparities. Even as India modernizes its energy ecosystem, it continues to place strong emphasis on harnessing its conventional power sources. India has achieved 1 billion ton coal production for the second successive year and this is a significant milestone which underscores India's growing self-reliance in the energy sector.
India is emerging as a global leader in renewable energy driven by ambitious targets and green transition policies with the goal of achieving 500 gigawatt of non-fossil fuel capacity by 2030. India is investing heavily in solar, wind, offshore wind and emerging green hydrogen technologies. Initiatives such as the National Green Hydrogen Mission and supportive regulatory measures have helped India attract substantial foreign and domestic investment in clean energy. India's updated nationally determined contribution, that is NDC, for the period 2031 to 2035 recently approved by the union cabinet further underscores the commitment towards building a prosperous and climate resilient India for our future generations. A strong policy push combined with falling technology costs has improved India's competitiveness in solar manufacturing and large-scale renewable deployment. Renewable energy also features prominently among India's sunrise sectors reflecting innovation-driven growth and alignment with global sustainability goals. These advances set the stage for India to become a major green energy export hub in the coming decade. Energy transition policies are aligned with goals of energy security, reduced import dependence and our climate commitments. Digital technologies are increasingly getting embedded in grid management, improving efficiency and system resilience.
As I proceed to conclude, let me also share certain thoughts with you on the way forward for Indian businesses and management at the current critical juncture. These are primarily in the nature of certain suggestions. I repeat these are primarily in the nature of certain suggestions which are for you to consider and possibly if you find merit to also adopt. At moments like this when the whole world is experiencing unprecedented volatility, it would be appropriate and in my opinion very prudent for Indian industry and business to, and I will list out a few points: number one, build organizational resilience. Two, strengthen balance sheets. Three, build new supply chains. Four, protect jobs. Five, reskill the available manpower. Six, diversify into new markets, especially for the exporters. And seven, invest strategically for the future readiness and for capitalizing on new opportunities. These measures I feel will go a long way in building sustainability and future growth of Indian business and industry.
Now let me sum up. Today I have touched upon certain aspects of macroeconomic governance and management that have enabled India to navigate through multiple global shocks. India is now seen as a safe anchor. I repeat, India is now seen as a safe anchor because it offers stability, predictability and prospects of long-term growth at a time when much of the world is marked by conflict, volatility, and policy uncertainty. Given the inherent strength of the Indian economy, the cumulative scorecard of this decade is already striking. But the more consequential story is what lies ahead. The growth levers for the next decade are not just aspirational. They are in fact already in motion and gaining momentum. A young and rapidly urbanizing population is driving a consumption wave that will power domestic demand for decades. The high level of government capital expenditure program is compounding infrastructure depth in roads, railways, ports and digital connectivity. The PLI scheme is seeding a manufacturing base across 14 high value sectors. India's digital public infrastructure continues to formalize the economy, broaden the tax base and deepen financial inclusion at scale. Services exports anchored in one of world's largest technology and professional service industries provide an engine for resilient external earnings.
Taken together, these are not cyclical tailwinds. They are structural, compounding and durable. India does not merely march towards becoming a developed economy by 2047. It marches with its foundations already laid, its institutions tested and its growth trajectory increasingly difficult to reverse. India's credibility as a rules-based, reform oriented economy with strong institutions, policy continuity and demographic and democratic accountability reinforce investor confidence and social stability. These strengths allow India not just to absorb global shocks but to convert disruption into opportunity. Even with all the turbulence around the world, India will find a way to triumph and emerge stronger. Thank you. Namaskar.
