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In an interview to PTI, FM Nirmala Sitharaman said the budget was “by the people, for the people, of the people”, and that PM Narendra Modi was fully behind the idea to cut taxes, but it took time to convince the bureaucrats
FM Nirmala Sitharaman said India need not worry about US President Donald Trump’s tariff war. (PTI)
Finance minister Nirmala Sitharaman, in an interview to PTI on Sunday, described the budget as “by the people, for the people, of the people”, and said Prime Minister Narendra Modi was fully behind the idea to cut taxes, but it took time to convince the bureaucrats.
“We have heard the voice of middle class who had been complaining about their aspirations not being met despite being honest taxpayers,” she told PTI.
She also said that India need not worry about US President Donald Trump’s trade tariff war. “I am not worried; I am fairly looking at India’s position,” she said.
ON TAX CUTS
“The voice which came wherever I travelled was, “We are proud taxpayers, we are honest taxpayers, we want to be continuing to serve the country by being good taxpayers. But would you think about the kind of things you can do for us?” So I had this discussion with the honourable PM, who put me on this specific assignment to “see what you can come up with”, and therefore we did a bit of work within the ministry and briefed the PM on what is before us, and guided by him, we have come up with this,” said the FM.
ON DONALD TRUMP’S TARIFF WAR
“India’s economy, particularly if we are looking to be a manufacturing hub, has strength in our services sector…India’s capability in terms of software, AI and stem-based research…I think India’s strength has to be kept in mind as much as working for removing the challenges for our own sake…,” said the FM.
“In the recent budget, we have also mentioned critical minerals. High tariffs for MSME will not help them. Some of the products which are not available in India, they will have to import and if they have to be import, I don’t gain by having a high tariff and stopping them from coming into India…So I need to have the balance in a way to which India’s interest as regards production as regards becoming a manufacturing hub…They have to be kept in mind,” said Sitharaman.
ON OPPOSITION’S CRITICISM
Responding to opposition’s criticism that the budget favoured Bihar and Delhi, Sitharaman said, “For want of criticism, they are picking this up. These are lame and lazy quick ways to look at budget. Everyone gets its due grant. I want them to go through the details and then come back.”
On Delhi election freebies, the FM said, “I strongly feel that states have the capacity to take these welfare measures. I strongly believe that homework is done by the BJP-ruled states, who then come up with schemes…Some states gave very big promises, but they don’t have the budget to fund them. Himachal is an example.”
ON INDIAN RUPEE
Sitharaman rejected criticism over the slide of the Indian rupee, saying it has depreciated only against a strengthening US dollar but remained stable against all other currencies because of the strong macroeconomic fundamentals.
She said a 3 per cent depreciation in the rupee against the US dollar in the past few months is a matter of concern as it makes imports costlier, but she rejected criticism that the local currency has seen all-round weakness. “I am concerned but I will not accept the criticism that ‘Oh Rupee is weakening!’ Our macroeconomic fundamentals are strong. Rupee wouldn’t be stable against all the currencies if the fundamentals were weak,” she said. “Rupee’s volatility is against the dollar. Rupee has behaved in a far more stable fashion than any other currency,” Sitharaman said.
“The RBI also has been looking at ways in which it will interfere in the market only to stabilise the need for avoiding huge volatility based reasons. We are all closely watching the situation,” she said.
She termed critics pointing to rupee volatility and depreciation as “a very quick argument”. “But in today’s dollar strengthening environment and in the new US administration, the rupee will have to be understood in its relationship with the dollar (and) the fluctuations which come as a result of that. Criticisms can come, but those criticisms will also have to go with a response with a bit more study,” she added.
ON INDIA’S TRACK RECORD
Sitharaman flaunted India’s unblemished track record of not faltering on any of its fiscal consolidation or debt reduction targets as she seemed to shrug off the passiveness of agencies like Moody’s which have not upgraded India’s ratings.
India, she said, had to borrow more during the pandemic to meet the fiscal needs of the economy amid global challenges, supply chain disruptions and geopolitical conflicts in two theatres.
