FM pitches for reforms at local bodies level to accelerate Viksit Bharat goal

NEW DELHI: Finance Minister Nirmala Sitharaman on Friday underscored the need for deeper reforms at the grassroots level, particularly in municipalities and village panchayats, to accelerate India's journey towards becoming a developed nation by 2047.

Stressing the need for reforms across all levels of government, Sitharaman said the Centre had been consistently undertaking measures to open up the economy and attract global capital, but local bodies also needed to strengthen their capacities to plan and execute development projects.

"The more we reform our systemic issues and move forward, the greater the ease in moving towards Viksit Bharat," she said in an interaction with the Atlantic Council on the sidelines of the IMF-World Bank annual meetings at Bangkok, Thailand.

Sitharaman said global investors were recognising the opportunities in India as a result of ongoing reforms, citing a recent disinvestment in IDBI Bank in which international investors had acquired close to 60 per cent of the shares.

She said the government was pursuing reforms to open up markets, listed companies and government-owned enterprises to fresh capital, which could support their expansion and growth across sectors.

However, she emphasised that reforms should not remain confined to the Union government, and state governments and local bodies are also required to undertake measures to improve governance and facilitate economic development.

India's three-tier governance structure comprises the Union government, state governments and local bodies, including urban municipalities and village panchayats, she said.

"The third layer belongs to the local municipalities, the township municipalities, and villages," Sitharaman said, calling for a stronger reform push at this level.

She noted that local bodies often lacked adequate capacity and skills to plan and implement development initiatives effectively.

There was a need to build their capabilities so that they could better plan local development, including waste management, road construction, last-mile connectivity, strengthening electricity transmission infrastructure, addressing environmental concerns and restoring water bodies, she said.

Sitharaman said reforms at the grassroots level were essential to ensure that local institutions could effectively address development needs and contribute to the country's broader economic transformation.

She called for greater investment in training and capacity-building for local governments, enabling them to plan for their areas' future and implement development projects more efficiently.