India needs its own economic models, Sitharaman says

Finance minister Nirmala Sitharaman this week urged India’s economists and universities to build policy models grounded in local data rather than defaulting to Western frameworks.

Speaking at the Delhi School of Economics’ diamond-jubilee valedictory on Monday, she said the discipline must move with the economy’s realities. “The methodology for studying the economy must evolve.”

Technology belongs at the center of that shift, she argued, framing it as a fresh input alongside the classical factors.

“Without technology, land, labor, and capital will remain where they are. Economies that adopt it across sectors progress faster, while those that limit its reach lag behind,” she said.

Sitharaman called for a bigger role for AI, advanced analytics, and field research in curriculum and policy work. “Read data, read between the data, and talk for India,” she said.

The finance minister added that imported theories often miss India’s structure, informality, and administrative constraints. “Many international economic theories are Western-centric. We need India-centric models that can also serve the global South,” she said.

The speech also pressed for closer ties between academia and government.

She urged the Delhi School of Economics to train economists and policymakers in advanced data analytics and artificial intelligence to improve early economic warning systems, policy design, and governance outcomes, and encouraged a multidisciplinary approach that blends economics with data science, environmental studies, and public policy.

Sitharaman pushed for classroom-to-field immersion with districts, small and medium businesses, self-help groups, and cooperatives so research answers real administrative needs.

The goal is rigor with empathy, Sitharaman said, while asking institutions to produce economists who can bridge numbers and lived reality.

“We should create economists with empathy, who understand both the numbers and the minds of the people,” she said.

Sitharaman tied the research push to India’s growth trajectory and policy priorities: “India stands together today and stands tall and stands distinctly on its feet because of the economic strength of India.”

She also sought multidisciplinary programs that pair economics with public policy, development studies, and technology, while pointing out that India needs a generation of economists who can build fit-for-purpose models, test them against local data, and feed them back into governance.