Sitharaman Pledges Support for Farmers, Urges Industry Expansion; AI Risks Under Review

Mumbai: Finance minister Nirmala Sitharaman on Saturday underscored the government's resolve to cushion vulnerable sections, such as farmers, from a surge in input costs in the wake of the West Asia conflict, just as it did during the pandemic, without upsetting the fiscal glide path. The Centre aims to contain its FY27 fiscal deficit at 4.5% of gross domestic product.

Addressing an audience of corporate honchos and top officials at the Economic Times Awards for Corporate Excellence in Mumbai, Sitharaman wondered what is holding industry back from expansion and capacity additions, pledging a patient hearing and remedial measures.

"We are certainly willing to hear any difficulty that stops Indian industry from expansion or capacity building or investing in newer technologies, artificial intelligence," she said. "Tell us what you (industry) need. Tell us what you want us to do, so that you feel incentivized to further invest and grow equally."

India imports a large volume of finished and intermediate goods, which reflects the scope it offers for its own companies to manufacture these products at home and reduce our import reliance, she stressed.

Capital outflows, reforms

Strong macroeconomic fundamentals should ideally--but don't necessarily--result in huge foreign investment inflows, the minister said, pointing at other considerations that investors may have when they pull out. Experts had earlier said many investors were pulling out to book profits, and could return later. Of late, some have pointed at renewed strategic considerations of foreign investors in the aftermath of the additional US tariffs on India.

"There are other considerations (for capital outflows). And we can always flag ourselves or flog ourselves and say, more reforms are required," the minister said, indicating the need for a free and more nuanced discussion on capital outflows. She said India is ready for reforms, and various government departments are already working on fresh initiatives under the direction of the Prime Minister to make it easier to invest, operate and manufacture here.

"Under this Prime Minister, there is never a shut door when it comes to reforms," she said.

Concerns around Anthropic's AI model

Sitharaman said the Ministry of Electronics and Information Technology is engaging with the US administration and Anthropic on risks associated with the latter's Claude Mythos, an advanced artificial intelligence model. Anthropic is also finding out ways to resolve the issue, she indicated.

Anthropic's claim that it found the tool could outperform humans at some cyber-security tasks has sparked global discussions around the dangers it could pose to digital services. On Thursday, Sitharaman urged banks to bolster cybersecurity systems and adopt a more proactive approach to tackle emerging threats linked to AI models.

The minister said the strategic sale of IDBI Bank will take place. It had entered an uncertain phase as financial bids for the lender were lower than the floor price set by the government. "There is no halting. It will happen," she said.