Sitharaman says govt listening to feedback on market taxation and investment cli ...
Finance Minister Nirmala Sitharaman has said the government is open to receiving suggestions on market-related taxation, including concerns around long-term capital gains tax and other levies, at a time when Indian equities have remained volatile and the rupee has faced pressure from global developments.Responding to a question from reporters on the sidelines of a business event on whether the government should review the tax structure amid weak market returns, foreign portfolio investor activity and global headwinds such as the West Asia crisis and tariffs, Sitharaman said the Centre was willing to hear different views.
“On this issue and on any other issue, we are always ready to hear, listen to people… We will take their inputs,” the finance minister said. Her comments come against the backdrop of heightened investor sensitivity to taxation, foreign fund flows and currency movement.
FPI flows, rupee pressure in focus
The remarks also come at a time when foreign investor flows have remained a key concern for Dalal Street. Foreign portfolio investor selling has weighed on equities in recent months, with geopolitical uncertainty and global risk aversion adding to pressure on emerging markets.
On Monday, however, Indian equities rallied sharply as global oil prices dropped on hopes of progress in US-Iran peace talks. The Nifty 50 rose 1.32% to 24,031.70, while the BSE Sensex gained 1.42% to 76,488.96, their highest levels since May 8.
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The rupee has also remained under watch. It closed at 95.23 against the dollar on Monday, extending gains for a third straight session after recovering from a record low of 96.96 last week.
As per experts interviewed by Reuters, the rebound was helped by lower crude oil prices and likely RBI intervention through state-run banks. RBI Governor Sanjay Malhotra has said the central bank will do “whatever is required” to ensure orderly movement in the foreign exchange market, while also indicating that the rupee appeared undervalued.
Sitharaman says inputs being gathered
Asked about the rupee, investment-related suggestions and whether the government was considering broader measures, Sitharaman said several inputs were being received from different quarters.
“As I said, a lot of inputs, a lot of suggestions are not just on rupee, on investment… lots of inputs are being gathered. People voluntarily send, some people are collecting from departments,” she said.
The finance minister was also asked about the Reserve Bank of India’s dividend and its impact on the fiscal position. The RBI last week approved a record Rs 2.87 lakh crore surplus transfer to the Centre for the last fiscal year, slightly below some market expectations.
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The larger debate now is whether the government will consider any changes to market taxation or capital gains rules in response to investor feedback. For now, Sitharaman’s comments suggest that the Centre is in listening mode, even as markets track global oil prices, FPI flows, the rupee and the RBI’s currency management strategy.
Sitharaman on fuel prices and status of OMCs
The finance minister also defended the recent increase in retail fuel prices, saying the government had already absorbed a significant part of the inflationary burden through earlier excise duty cuts on petrol and diesel.
Sitharaman said the Centre had foregone more than Rs 1 lakh crore annually in tax revenues to shield consumers from the impact of higher crude oil prices triggered by global disruptions, including the West Asia conflict.
“Had we not given that reduction at that time, a Rs 10 increase would have happened, which we absorbed,” she said, adding that the latest price hikes were coming from oil marketing companies as they responded to the rise in global crude costs.
Petrol and diesel prices have been raised by nearly Rs 7.5 per litre in four installments since mid-May as oil marketing companies moved to narrow the gap between procurement costs and retail prices.
Sitharaman said the government would continue to monitor the situation closely, especially since higher crude oil imports also add pressure on foreign exchange. “These are going to be challenges, but I’m confident we will be able to handle those challenges which are not of our making,” she said, adding that the government would ensure consumers do not suffer.
Speaking at the TEXPROCIL Export Awards event earlier today, Sitharaman also used her address to exporters to flag a wider shift in global trade, saying geopolitical fragmentation was reshaping supply chains and raising uncertainty around raw material availability and shipping costs.
Exporters, she said, must adapt to changing requirements around sustainability, traceability and technology, as global retailers increasingly demand certified materials, lower carbon footprints and fair labour practices.
(With inputs from Agencies.)
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