Finance Minister (FM) Nirmala Sitharaman said the government would be interested in discussing the removal of long-term capital gains (LTCG) tax during Budget consultations, as both domestic and international investors are questioning equity taxation.
During her speech at the Bloomberg New Economy Forum in New Delhi, Sitharaman mentioned that the discussion also covers the securities transaction tax (STT) and the potential for uniform treatment across various asset classes.
“LTCG, many individuals are discussing, including both Indian and international investors,” she mentioned.
“This discussion regarding STT in the market and the issue of uniformly addressing all asset classes involves considerable debate. This discussion is beneficial for health,” said Sitharaman.
The FM noted that private investment was flowing into areas like renewable energy and semiconductor manufacturing.
“It’s not only AI; it also involves semiconductors, including semiconductor chips, design, and packaging.” India is advancing into domains that will facilitate AI,” she stated.
Sitharaman stated that India has drawn investments in data centres, semiconductors, transmission lines, renewable energy, green hydrogen, and green ammonia. She said the government had intentionally chosen to produce both sophisticated, finer-nanometre chips and simpler chips that are still crucial for a significant part of the economy.
On infrastructure funding, Sitharaman announced that the National Infrastructure Pipeline, initiated in late 2019, has surpassed USD 4.5 trillion.
She mentioned the National Bank for Financing Infrastructure and Development (NaBFID) and the National Investment and Infrastructure Fund (NIIF) as organisations that assisted in mobilising capital for infrastructure development.
“Over the past decade, India has excelled in every sector that needed. This momentum will persist,” she stated.
The FM added that local investment is now shifting towards renewable energy, chip design, biosimilars, drug production, and maintenance, repair, and overhaul (MRO) centres.
She mentioned that India’s civil aviation industry was expanding at approximately 16 per cent, highlighting investment prospects in this field.
On rupee, Sitharaman asserted that the Reserve Bank of India (RBI) would persist in its efforts to manage volatility instead of aiming for a fixed exchange rate.
“They aren’t attempting to stabilise the rupee. They are trying to mitigate the volatility, and for this, the RBI is exerting considerable effort,” she stated, noting that these initiatives will persist.
Furthermore, the FM added that India’s macroeconomic fundamentals are solid and emphasised that the government has exercised prudence in fiscal discipline.
