The ongoing pandemic is likely to leave a lasting impact on the way economies and societies operate, Sitharaman said in her address to the International Monetary and Financial Committee.
Even with high rates of vaccinations in the developed world as well in most of the major Emerging Market Economies (EMEs), victory over the pandemic is still a distant dream, she noted.
“As the virus continues to mutate and continues to resurface in places thought to have controlled it, there is no alternative but to ensure universal availability of vaccines.
“India has ramped up its vaccine production within a short span of a few months, as roadblocks due to supply chain disruptions got resolved. India remains committed to providing vaccines to vulnerable and low-income countries,” Sitharaman said.
Observing that a faster than expected policy normalisation in Advanced Economies (AEs) and its implications for EMEs would need to be looked into more closely, she called for a coordination among the membership and the International Monetary Fund (IMF) to play a key role in ensuring smooth transition of policy withdrawals.
Sitharaman said that to ensure that post-pandemic policy normalisation does not cause economic disruption, particularly in emerging markets and developing economies, it is necessary that the IMF remains adequately resourced and be at the core of the global financial safety net.
“Therefore, we reiterate that dependence of the Fund on borrowed resources can at best be a temporary short-term arrangement,” she said, adding that permanent resources should be augmented with quota revision and the long pending issues of out-of-lineness and underrepresentation of EMEs should be addressed.
“We expect discussion on the 16th General Review of Quotas to progress swiftly and get completed within the agreed time frame,” she said.
Briefing the IMF on India’s COVID 19 responses, Sitharaman said that unlike during the first wave, and though the delta variant caused a sharp surge in infections during the second wave, the economy adapted to the work environment under COVID-19 with enhanced use of digitalisation.
The containment measures were also more focused and localised during the second wave. To protect economic activity, the package of fiscal, monetary and financial measures provided support to businesses and households at an unprecedented scale.
More importantly, India, unlike most economies, continued its agenda of structural reforms during the pandemic, she said.
“Wide-ranging structural reforms, including agriculture and labour reforms, and monetisation of assets, are expected to contribute towards a structural acceleration of economic growth,” she said.
As the pandemic impacts the vulnerable section of the society relatively more, India significantly expanded income support through food subsidy and cash transfers, especially for those at the bottom of the income pyramid.
Further, the One Nation One Ration Card policy ensured that the bottom two-thirds of the population eligible for food subsidy could access it from anywhere in India rather than be restricted to the state of their registration, she said.
“This, in particular, has benefitted the migrant workers. Further, the world's largest vaccination drive is underway in India.
“With steady rise in average daily vaccination doses from 42.0 lakh in July to 56.6 lakh in August, by September more than 73 per cent of the adult population have received at least one dose, while more than 26 per cent have received both doses. With this, the target to fully vaccinate all our adult population by the end-December 2021 seems achievable,” Sitharaman added.