India on track to become world’s third-largest economy: Nirmala Sitharaman

Finance Minister Nirmala Sitharaman on Tuesday said India is poised to become the world’s third-largest economy, driven by sustained growth and strong fundamentals.

Speaking at the Diamond Jubilee Valedictory Lecture of the Delhi School of Economics, Sitharaman said India’s rapid economic progress distinguishes it on the global stage.

“Of course, India and its population, India and its location have strategic significance, but India stands together today and stands tall and stands distinctly on its feet because of the economic strength of India,” she said.

We based our approach on a study which showed that capital expenditure has a much higher multiplier effect than revenue expenditure – and that has proven to be correct.

The fact that the growth numbers are sustaining at where they are is a clear answer that multiplier is… pic.twitter.com/zIdYGgUNEM

— Nirmala Sitharaman Office (@nsitharamanoffc) November 4, 2025

The finance minister noted that India has advanced from being the tenth-largest economy in 2014 to the fifth-largest now, and is expected to move up to the third position soon.

Highlighting the country’s social progress, Sitharaman said government initiatives have helped pull 25 million people out of multi-dimensional poverty.

On the banking sector, she said the financial health of public sector banks has strengthened considerably since the “twin balance sheet” problem that affected lenders and corporates nearly a decade ago.

Sitharaman also reaffirmed the government’s commitment to fiscal prudence, expressing confidence that the fiscal deficit target of 4.4 per cent for the current financial year will be met.

The Union Budget projects the fiscal deficit for 2025–26 at 4.4 per cent of GDP, equivalent to Rs 15.69 lakh crore.