Economy / FM Sitharaman Outlines Next Phase of Tax Reform, Targets Customs System Overhaul
·7 months ago·3 min read
Key Points
- FM Nirmala Sitharaman says customs tax reform is the next major policy priority.
- Rupee should find its natural market level amid fresh currency depreciation.
- RBI revises GDP forecast to 7.3% for 2025–26 and lowers inflation outlook to 2%.
New Delhi, Dec 6: Finance Minister Nirmala Sitharaman announced Saturday that following reforms in income tax and GST, the government's next major focus will be simplifying the customs tax system, while also stating that the rupee should be allowed to find its natural market-determined level.
Speaking at the Hindustan Times Leadership Summit here, the minister said that the government has moved to a “faceless” income tax system online and now, “the same virtues will have to be brought to customs”.
She further stated that smuggling of illegal goods is still a serious problem.
"We have brought down customs duties in the last two years. Customs is the next big assignment," FM Sitharaman noted.
On the Indian rupee vs US dollar debate, Sitharaman said that the rupee will find its own natural level, after the currently hit an all-time low of 90 against the US dollar this week.
“Rupee and currency exchange rates are sensitive issues. We raised it much better while we were in the opposition. Inflation rate was so high back then, the economy was fragile then, and when your currency also takes a hit, it is nobody's bright spark," she said.
Finance Minister further stated that “Look at the fundamentals of the economy, where we stand, some factors are very important which position India in a very different league. This currency debate will have to be circumscribed by those realities”.
On Friday, the rupee closed at 89.98 against the US dollar. Over the week, the currency depreciated by nearly 0.6 per cent.
Meanwhile, the Reserve Bank of India (RBI) has raised its GDP growth forecast of the Indian economy to a robust 7.3 per cent for 2025-26 from 6.8 per cent earlier, on the back of an improved outlook driven by strong agricultural prospects, GST rate cuts continuing to play out, low inflation and strong balance sheets of corporates and banks.
Also Read: RBI Cuts Repo Rate by 25 Basis Points to 5.25% in Bid to Spur Economic Growth.
The RBI’s monetary policy committee (MPC) also slashed its forecast for India’s inflation rate for the financial year 2025-26 to 2 per cent -- from 2.6 per cent predicted in October due to the sharp decline in food prices and the GST rate cuts playing out.
(IANS)
Speaking at the Hindustan Times Leadership Summit here, the minister said that the government has moved to a “faceless” income tax system online and now, “the same virtues will have to be brought to customs”.
She further stated that smuggling of illegal goods is still a serious problem.
"We have brought down customs duties in the last two years. Customs is the next big assignment," FM Sitharaman noted.
On the Indian rupee vs US dollar debate, Sitharaman said that the rupee will find its own natural level, after the currently hit an all-time low of 90 against the US dollar this week.
“Rupee and currency exchange rates are sensitive issues. We raised it much better while we were in the opposition. Inflation rate was so high back then, the economy was fragile then, and when your currency also takes a hit, it is nobody's bright spark," she said.
Finance Minister further stated that “Look at the fundamentals of the economy, where we stand, some factors are very important which position India in a very different league. This currency debate will have to be circumscribed by those realities”.
On Friday, the rupee closed at 89.98 against the US dollar. Over the week, the currency depreciated by nearly 0.6 per cent.
Meanwhile, the Reserve Bank of India (RBI) has raised its GDP growth forecast of the Indian economy to a robust 7.3 per cent for 2025-26 from 6.8 per cent earlier, on the back of an improved outlook driven by strong agricultural prospects, GST rate cuts continuing to play out, low inflation and strong balance sheets of corporates and banks.
Also Read: RBI Cuts Repo Rate by 25 Basis Points to 5.25% in Bid to Spur Economic Growth.
The RBI’s monetary policy committee (MPC) also slashed its forecast for India’s inflation rate for the financial year 2025-26 to 2 per cent -- from 2.6 per cent predicted in October due to the sharp decline in food prices and the GST rate cuts playing out.
(IANS)
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