Tax stability for businesses to bond inclusion in global index; 5 highlights from FM Sitharaman’s speech today | The Financial Express

Tax stability for businesses to bond inclusion in global index; 5 highlights from FM Sitharaman’s speech today

India is the fastest growing economy in the world and over the next 25 years, the government will reposition it to ensure that India becomes a developed nation by 2047, said Finance Minister Nirmala Sitharaman

Tax stability for businesses to bond inclusion in global index; 5 highlights from FM Sitharaman’s speech today
The government will go ahead with the banking sector reforms as well

India is the fastest growing economy in the world and over the next 25 years, the government will reposition it to ensure that India becomes a developed nation by 2047, said Finance Minister Nirmala Sitharaman at an event today. “By the time India celebrates the first centenary of independence, we will have to reset lots of things so that we become a developed nation by then,” the FM said adding that the biggest tools for such a reset are digitisation, education and building more and more infrastructure so that India’s hinterland doesn’t remain unconnected to the cities. Here are five key highlights from FM’s speech.

Privatisation of PSU companies, reforms in banking sector

The government is committed to its intent to privatise PSU enterprises and push banking sector reforms, said Sitharaman. “The initial public offering of Life Insurance Corporation of India has shown that the government is committed to the process of disinvestment. The government will go ahead with the banking sector reforms as well,” she added. Note that the central government had proposed privatisation of two PSU banks along with one general insurance company in the 2021-22 Budget.

Tax stability for businesses on cards

Going forward, the government will provide tax stability to businesses, the Finance Minister added. Talking about governance, Sithraman said that the government does not support entitlement in governance as it leads to condescension. In regards to taxation, the FM reiterated that the government has gone to great lengths to remove anomalies of retrospective taxation. “The widening tax base is an issue and when done it will be more reasonable and tech-driven,” Sitharaman said.

Windfall tax on petroleum products, crude not ad hoc

Clarifying on the windfall tax being termed ad hoc by some, Sitharaman said windfall tax on petroleum products and crude is not ad hoc, but is being charged in regular consultation with the industry. “The tax rate and its resetting are done in complete consultations with the industry. The very idea was implemented after taking the industry into full confidence,” she said, adding that when the government suggested the idea, they told the industry that the tax rate will be reviewed every 15 days and they have been doing that. 

India bond inclusion in global index: Expect a conclusion soon

On the topic of bond inclusion in global index, the minister said many things have changed since the pandemic, especially in terms of inflows. Mostly, fund inflows have not been as expected, which of course is mostly due to the pandemic, she said, adding “however, I expect a logical conclusion to this sooner.” 

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Widening tax base issue needs consultations and analysis

Speaking on whether the government is planning to increase the tax-GDP ratio which is only about 10 now, FM stated that the widening tax base is an issue that needs a lot of consultations and analysis. However, the increasing number of income tax filings gives her some clue on the possibility of widening it. “But we want to ensure that as and when it is done it looks reasonable and tech-driven,” she said.

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