MUMBAI: On the heels of the income tax cut announced in the Union Budget, finance minister Nirmala Sitharaman on Saturday said a reduction in goods and services tax (GST) is in the offing, but remained tight-lipped on reduction in capital gains tax, citing resumption of the Parliament session next week.
In a fireside chat at The Economic Times Awards for Corporate Excellence, Sitharaman said work on rationalising GST rates was almost complete. “I have personally taken it upon myself to review the committees’ work and take it to the GST Council for a final decision. We are very close to making some critical decisions on rate reductions and number of slabs,” she said. “I have been clear rates will come down. When GST was launched, the revenue-neutral rate was 15.8%. Since then, it has come down to 11.4%… There is no item for which GST rate has increased. In fact, it has gone down, and we will continue this trend.”
India always puts own interest first in talks with a country: FM
We must stop running down our own country. If we keep focusing on negative aspects, we won’t move forward. We need to understand that India is the fastest-growing country, despite the challenges. We cannot afford to live in the past; we must embrace the present and future. We need to build confidence in our growth, trust in our systems, and encourage optimism,” Sitharaman said.
Regarding trade negotiations with the US, she said while her colleague Piyush Goyal was overseeing the talks, “both sides should aim for a good treaty”. Sitharaman pointed out that challenges like geo-economic fragmentation and tariff wars also presented opportunities for India. Sitharaman also underscored India’s approach to trade agreements, highlighting that “India’s guiding principle in negotiations with any country is always putting India’s interest first”.
“I won’t shy away from saying that some of the bilateral agreements signed earlier — whether with individual countries or groups — were either negotiated too hastily or contained loose language. I do not wish to attribute any intentional motives, but in some cases, there was a rushed understanding of the collateral consequences we face today,” she said. The FM added that the commerce department was reviewing all Free Trade Agreements (FTAs) with partners like Japan, South Korea, and ASEAN, ensuring that India’s interests were better protected in future agreements. She reaffirmed India’s commitment to the Base Erosion and Profit Sharing framework, emphasising its importance, despite some countries withdrawing.
Sitharaman acknowledged the issue of “dumping of excess inventory” from other countries but underlined the need for a balanced approach to protect Indian manufacturers while ensuring access to cheaper inputs for another layer of manufactures. She mentioned that stakeholders had differing opinions on how to handle dumped goods and said the govt would carefully navigate this issue.
The FM also addressed the issue of investment, noting that industry, not govt, should determine where investments should be made. She said that “if industry wants to invest or if it is investing only in certain sectors, it’s a commercial decision”, and urged industry players to voice their concerns so that the govt could understand the progress being made.
Sitharaman said while govt was working to streamline regulatory coordination, it had no plans for a permanent body. The focus was on simplifying interactions between regulators, especially non-financial ones, to reduce stakeholder confusion. She also reaffirmed govt’s commitment to reducing its stake in public sector banks, encouraging retail investors to actively participate in these banks.
On the issue of non-banking financial companies (NBFCs) and micro-credit, she acknowledged that some were too aggressive in their lending practices but were reined in by RBI with guidance, which had now been relaxed, leading to an improvement in the situation.
We must stop running down our own country. If we keep focusing on negative aspects, we won’t move forward. We need to understand that India is the fastest-growing country, despite the challenges. We cannot afford to live in the past; we must embrace the present and future. We need to build confidence in our growth, trust in our systems, and encourage optimism,” Sitharaman said.
Regarding trade negotiations with the US, she said while her colleague Piyush Goyal was overseeing the talks, “both sides should aim for a good treaty”. Sitharaman pointed out that challenges like geo-economic fragmentation and tariff wars also presented opportunities for India. Sitharaman also underscored India’s approach to trade agreements, highlighting that “India’s guiding principle in negotiations with any country is always putting India’s interest first”.
“I won’t shy away from saying that some of the bilateral agreements signed earlier — whether with individual countries or groups — were either negotiated too hastily or contained loose language. I do not wish to attribute any intentional motives, but in some cases, there was a rushed understanding of the collateral consequences we face today,” she said. The FM added that the commerce department was reviewing all Free Trade Agreements (FTAs) with partners like Japan, South Korea, and ASEAN, ensuring that India’s interests were better protected in future agreements. She reaffirmed India’s commitment to the Base Erosion and Profit Sharing framework, emphasising its importance, despite some countries withdrawing.
Sitharaman acknowledged the issue of “dumping of excess inventory” from other countries but underlined the need for a balanced approach to protect Indian manufacturers while ensuring access to cheaper inputs for another layer of manufactures. She mentioned that stakeholders had differing opinions on how to handle dumped goods and said the govt would carefully navigate this issue.
The FM also addressed the issue of investment, noting that industry, not govt, should determine where investments should be made. She said that “if industry wants to invest or if it is investing only in certain sectors, it’s a commercial decision”, and urged industry players to voice their concerns so that the govt could understand the progress being made.
Sitharaman said while govt was working to streamline regulatory coordination, it had no plans for a permanent body. The focus was on simplifying interactions between regulators, especially non-financial ones, to reduce stakeholder confusion. She also reaffirmed govt’s commitment to reducing its stake in public sector banks, encouraging retail investors to actively participate in these banks.
On the issue of non-banking financial companies (NBFCs) and micro-credit, she acknowledged that some were too aggressive in their lending practices but were reined in by RBI with guidance, which had now been relaxed, leading to an improvement in the situation.