‘We Have Honoured the Taxpayer,’ says Nirmala Sitharaman

TWO DAYS AFTER SHE PRESENTED HER EIGHTH BUDGET IN A ROW, a cheerful Union Finance Minister Nirmala Sitharaman spoke extensively about her range of priorities and concerns while challenging misconceptions about her new tax proposals, among others, at the packed Open House event organised by the RP-Sanjiv Goenka Group (RPSG) and anchored by RPSG Chairman Sanjiv Goenka on the evening of February 3 at the Leela Palace Hotel in New Delhi. The finance minister, who had also attended Open House in July last year, received applause from the audience when she cogently outlined her expectations from Indian industry, which she said has been through highs and lows and has survived the seemingly insurmountable odds of the past.

Sitharaman argued that the rules of engagement have changed forever while also dwelling on topics as precarious as US President Donald Trump’s tariff threats and their direct and indirect impact on the country. She went on to outline the fiscal discipline she expects Indian states to follow and delved into what she sees as likely challenges for Viksit Bharat 2047, the vision to make India a developed nation by 2047 when independent India turns 100.

Sitharaman was also at her forceful best, allaying fears of industrial segments that demand government support against global monopolies, suggesting that the Narendra Modi government gives primacy to business rationale and the development of local companies, be they big or small, over other factors.

The session began with Shashwat Goenka, Vice Chairman, RPSG Group, welcoming Sitharaman. He said, “Today, I have the privilege of welcoming someone who leads from the front. She is someone with a sharp financial acumen and immense clarity of thought. Her leadership has been instrumental in driving major structural reforms. She is dynamic. She is articulate and visionary.” Commending the Union Budget 2025 for being “progressive, inclusive, balanced” and “growth-oriented”, he set the tone of the interaction that followed between Sitharaman and his father Sanjiv Goenka who, at the outset, thanked her for “reposing faith in the taxpayer,” a big departure from what previous governments had done.

Before letting the audience address questions to the finance minister, the RPSG Chairman un­derlined certain reforms and measures initiated by the government on Sitharaman’s watch, which he said would help India take on the world on its own terms. To his first question about the pace of privatisation that is often hampered by frivolous lawsuits, the finance minister said that disinvest­ment is a commitment from the government’s side and there is no U-turn or change of position on it. While acknowledging that the government continues to face hurdles on that front, she responded, “It is no secret to say that many of our public sector undertakings (PSUs) which were Cabinet-cleared for disinvestment… are not yet institutionally ready for going to the market.” She noted that while there is unity of action within the government, vested interests are at play. As an example, Sitharaman brought up the difficulties the government faced overseas while selling off Air India.

As with Sanjiv Goenka’s next query on the preparedness of the country to face tariff wars being constantly talked about in the international media, Sitharaman said that India will face them and overcome them as and when such measures are taken. Emphasising that the country is ready to fall back on all measures, including negotiations at bilateral and multilateral levels, she added, “We are conscious of it. We are watching it. We’re also looking at the collateral damage that we will have to face based on actions taken on somebody else.” The finance minister was talking about the tariff war that Trump has unleashed on countries like China, Mexico and others as part of his much-hyped efforts to protect American business interests. She also said that any adverse impacts of such steps are being assessed and studied. “But the ways and means in which we will handle it can only be [clear later],” she pointed out matter-of-factly.

After the floor was opened to questions from the guests, Sitharaman enthralled the audi­ence with her characteristic wit, besides stating that she would consider some questions and explanations as inputs for internal discussions.

To a question from Vivek Jain, Chairman, INOXGFL Group, specifically on the need to promote and incentivise companies that make chemicals for batteries used in electric vehicles (EVs), a segment where he said China currently enjoys close to 95 per cent of global market share, Sitharaman said that the Centre pursues a policy-driven approach on all such matters. When it is imperative for local companies to import such materials, the government understands the requirements of the industry, she suggested. Giving zero customs duties on certain products is done on a “very principled basis”, she said, add­ing that rationalisation has been happening in the past two to three years, and even in this current Budget, to address domestic concerns. “If imports are necessary for our own manufacturing, we should allow them to come at an affordable price,” she maintained. Vivek Jain’s question was about the need to promote chemicals-making units for EV batteries locally in India in the years ahead. “In this Budget proposal, duty reduction has happened where we want to support domestic capacities inclusive of EVs, batteries, and also many semiconductor-related components and goods,” the finance minister clarified.

To businessman and columnist Suhel Seth’s question about her “asks” from Indian in­dustry, Sitharaman said from a historical perspective, “I am going to have to choose my words because I think Indian industry has seen days under the socialist era. Indian industry has seen those days when India apparently opened up after 1991… when I speak of India’s industry, I speak being fully conscious that you have survived all these days and you are up and doing your business today so… it’s not as if I’m telling you something as though you have never existed before.”

“The first thing I would want industry to do is to keep talking to the government; tell us where you have difficulties,” she said. “Secondly, you should also talk to the government about your perception about what’s happening globally. It’s one thing for the government to see another government acting on something, but the businesses have their own percep­tions,” she opined, adding that it is crucial for the government to know the commercial instincts of businesses to take cognisance of them. “That is why some of the most developed countries have industry actively engaging with governments. I’m not saying you should become a lobbyist because in India lobby has a different sense but you should actively, right­fully engage with the government so that it can influence the government’s own diplomacy and many other interests,” she advised.

“Thirdly,” Sitharaman said, “your associations will also have to move around the country to say how much has been done or how much is not done—this I say from both the point of view of GST and from the point of view of customs or direct taxation or policy or any regulatory difficulties.”

Sanjiv Goenka used a cricketing analogy to introduce Devansh Jain, Executive Director, INOXGFL Group, as the “the equivalent of the Abhishek Sharma in renewable energy.” Jain wanted the finance minister to offer insights on the rationalisation of taxes on inputs used in the renewable energy sector, a topic he had brought up last year before Sitharaman. Many of the inputs used across wind and solar power segments attract a GST of 15-18 per cent. Under the current tax framework, solar panels are taxed at an 18 per cent GST rate.

Sitharaman said that she is aware of the matter and that she recalls the discussion last time round. “In fact, nothing has moved [on that front] because the group of ministers is working on it but there’s more to be done,” she said. Her logic is that the government does not want to come up with a piecemeal policy.

Next was the turn of Avarna Jain, Chairperson, RPSG Lifestyle Media, who sought tips from the finance minister on aiding empowerment of women in the run-up to the lofty goals the government envisages. Sitharaman said, “The fact that you have reached where you have itself can stand out as a motivational point for many of those who want to come up on their own.” Sitharaman encouraged Jain to support and guide aspiring women.

For his part, Karan Paul, Chairman of the Apeejay Surrendra Group, chose to ask a gen­eral question about the cost of money, a crucial aspect of the monetary system that affects businesses, especially those with thin margins whose survival depends on greater liquidity.

“At once it belongs to the terrain of the RBI and the government,” the finance minister said, explaining that she did not wish to encroach on what is rightfully the Reserve Bank of India’s (RBI) turf. She said the government is trying to open up many more avenues through which money is made available to businesses of all sizes and sectors. “That is where I think the big-ticket efforts are going on—where you are able to get resources from even abroad and in a globally competitive way. We are also making efforts to deepen our bond markets and that has actually started to pay off in the sense that Indian participants are themselves now coming into the bond markets.”

She added that RBI itself is periodically reviewing efforts to bring liquidity into the market.

Shashwat Goenka contributed to the animated discussion on India’s future by asking the finance minister about what she forecasts are the two biggest challenges for India by 2047.

Sitharaman replied that her foremost concern is regarding global uncertainties, and elabo­rated next on the grave challenge of transition from fossil fuels to renewables. “I’m happy that the government has laid before itself various ways in which it can widen the renewable basket,” Sitharaman said, adding that India would then have small model nuclear reactors to offset the impact of such challenges. She also noted that despite the challenges, she is con­vinced India is on the right track as of now in terms of policies to meet those eventualities.

Ajay S Shriram, Chairman and Senior Managing Director, DCM Shriram Ltd, said that he is worried about the fiscal discipline of some states that tend to live life beyond their means. He wanted to know what the Centre could do to not let them go astray. Sitharaman answered, “The Centre can oversee the borrowings of the state which is a Constitution-given right to the Centre under Article 293.” Sitharaman said that Prime Minister Modi has been clear about not inheriting debt for the next generations. “From 2021 we are very transparent about borrowing,” she said, adding that states that are borrowing to meet their “revenue matters” and not asset creation are guilty of passing on the debt to coming generations.

“Your grand children are going to pay for what you are spending on. At least, if you are spend­ing money on asset creation, your grandchildren will be paying for something that they can use through which there can be an economic activity, where monetisation of that asset can happen,” she explained. The finance minister said that the Centre keeps speaking to the states on this subject and it is also incentivising the states by giving them monetary rewards to build their capital assets. “We are helping. We are advising. We are counselling. Besides, we are not treating ourselves differently. We are practising what we preach,” she said, reeling out numbers.

Responding next to a query from Anas Rahman Junaid of Hurun India on which sectors she sees the country leading in by 2047, Sitharaman said, “We will be supporting semicon­ductors. We will invest in AI, biological sciences research and innovation.” She said the government is committed to backing 14 sunrise sectors. According to her, nothing is worth it without achieving the zero-poverty targets.

Later, when ace stock market investor Vijay Kedia complained about “the entire burden” of personal income tax lying on the shoulder of 2 per cent of the population, Sitharaman said that she found the question strange. “When you put it like that, it gives a feeling that we are going to put all the burden on the 2 per cent while we let go of the others. It is, first of all, the step that we have taken in this Budget to honour the taxpayer. That is why we have taken it and that has resulted in taxpayers getting relief. We want to respect honest taxpayers but we also have a duty to widen the tax base,” she averred.

Again, when businessman Utsav Parekh brought up the matter of the top income tax slab being left without any benefits in this new proposal, the finance minister challenged him to do his calculations and that she would send in the data to help him with that. “If you do your calculations, I’m confident that what you were paying today is far higher than what you will be paying from April 1… I am absolutely sure that for every income band, the rates have been brought down. Please check and, if necessary, I’ll send you the data.”

To certain other questions raised by Krishna Kumar Bangur, Chairman of Graphite India, and others about taxation for new companies, the finance minister offered to take the points as feedback for discussions within the government. She had some counter-questions for Vishambhar Saran of Visa Steel Ltd who wanted to know about relief for the steel industry in India. “Why is it that low-grade iron ore goes out and comes back as pellets, and why can’t Indian companies do that here?” Among the others who took part in the interaction were Sanjeev Agrawal, Group Chairman, MM Agrawal Group, and Girish Mehta. Incidentally, Dhruv Galgotia, CEO, Galgotias University, said, “AI has been an absolute game-changer, and it is going to add almost $900 billion to the Indian economy by 2035. And I think we all must adapt to the AI decade. I feel that the next DeepSeek or ChatGPT will come out of India because the government has already laid the foundation with its commitment to AI and the funding that is involved. It is giving a big push to education and I think this Budget is a people’s Budget. There is a lot of growth expected in consumption and spending. I think it is going to be an exciting stage to be in.”

When it was time for her to leave, Finance Minister Sitharaman exited energetically and with a winning smile despite her fast-paced schedule that can overwhelm most people. She got a standing ovation from the audience.

Avarna JainDevansh Jainindustry leadersNirmala SitharamanOpen House 2025RP-Sanjiv Goenka GroupSanjiv GoenkaShashwat GoenkaUnion Budget 2025