Realise investor anxiety, will consider feedback, says FM Nirmala Sitharaman

Ahead of the Union budget, finance minister Nirmala Sitharaman on Monday acknowledged investor concerns amid changing circumstances and said the government would consider the need to deepen and widen equity and bond markets while keeping its focus on trust-based taxation, ease of compliance and new-age skilling to generate employment.

“Whilst I observe this with not being biased either way, the taxation structure was what it is today even in 2023-24 when we had good inflow into the country,” she said at the Financial Express Leadership Awards in Mumbai.

Also Read | Nirmala Sitharaman urges regulators to speed up refunds of unclaimed bank deposits, shares and funds “Nothing differently was done for drawing investments. But, of course, the situation is very different now.

Circumstances have changed. Challenges have grown. More FII outflows, net, have happened. It started resuming now. They’ve started coming back now,” she said. Without disclosing specific policy details ahead of the budget, Sitharaman said the government would take investor concerns into account, given the importance of sustaining economic growth.

“So, I know that circumstances have changed, and therefore, voices of concern are louder. I quite appreciate that. So, I’ll consider all these, because at a time where our growth is very important, where people are putting their very best, that we are able to see sustained 7-plus growth, in order to keep that intact, we need capital and equity, particularly now,” she said.

“Although the last few years have been placing a lot of emphasis on bond market, deepening it, widening it. Now we also have this voice which says, come on, even equity needs that kind of support,” she said. When asked again whether the budget would roll out a red carpet for the dollar, Sitharaman cautioned against framing the issue as favouring foreign investors over domestic ones.

“He [interviewer] would be gracious enough to say, FM said red carpet for the dollar. And, after which Indian investors would say already there’s a bias for foreign investors. You didn’t want red carpet for the Indian Rupee?,” she said adding, “So, on that ground, I don’t answer you.” Also Read | Nirmala Sitharaman, Rahul Gandhi spar over Tata leadership dispute: ‘Stop politicising every issue’ Sitharaman also weighed in on the ongoing developments at the Tata group, saying the matter required commercial judgement and cordiality rather than government intervention.

“I think these are very delicate matters. And matters where a lot of commercial and business acumen will have to work, business cordiality will have to work,” she said. Acknowledging the Tata group’s contribution to the economy and its global standing, she said the matter should be resolved amicably within the group.

“The contributions of the Parsi community have made Tata as a huge global brand,” she said, noting that the group was engaged in a wide range of activities and was a critical component of the Indian economy. “So, this [Tata Group] is a very critical component to Indian economy, and therefore, it has to be amicably settled among themselves.

So, they talk it out to make sure that it comes back quickly to some normalcy. It cannot be spilling out like this in the public. And, for the maturity of that leadership, we would like to have this scene settled sooner,” she said.

Also Read | Debate on LTCG, securities tax 'healthy', says Finance Minister Nirmala Sitharaman On policy priorities ahead of the budget, Sitharaman said the government would continue investing in skilling young people to prepare them for new-age technologies and improve their employability.

She also emphasised the need to incorporate artificial intelligence (AI) into education curricula and skilling programmes. She said the government would continue its focus on trust-based taxation, citing corporate tax reductions, personal income-tax rationalisation and indirect tax reforms under the second version of the Goods and Services Tax (GST 2.0).