Finance Minister Nirmala Sitharaman told delegates at the Bloomberg New Economy Forum in New Delhi on Tuesday that the government is ready to hear suggestions on eliminating the long‑term capital gains (LTCG) tax as part of the consultation process for the forthcoming Union Budget. She noted that both domestic and foreign investors have been actively debating the treatment of capital gains, the securities transaction tax (STT) and the broader question of whether different asset classes should be taxed on comparable terms.
Tax policy under review
Speaking to the audience, Sitharaman emphasized that the budget preparation is already underway and that she could not commit to specific measures at that stage. “We are very close to the Budget and the preparation for the Budget has started, and it may not be the best time for me to say what I will or what I will not consider,” she said. Nonetheless, she signalled an openness to consider proposals that would remove the LTCG tax, acknowledging the concerns raised by investors about the current tax framework.
RBI’s stance on rupee volatility
The finance minister also addressed the currency’s recent weakness, attributing most of the rupee’s depreciation over the past year to external, global challenges. She described the depreciation as “significant” and pointed out that the Reserve Bank of India (RBI) would continue to act to curb excessive fluctuations rather than targeting a specific exchange‑rate level. Sitharaman highlighted the RBI’s focus on limiting sharp swings, while noting that India’s strong foreign‑exchange reserves and solid macro‑economic fundamentals provide a buffer against external pressures.
She reiterated that the government will maintain a disciplined fiscal approach, ensuring that spending on priority areas such as welfare, education and healthcare remains protected even as it navigates currency dynamics.
Semiconductor strategy and AI‑driven demand
Turning to the technology sector, Sitharaman outlined India’s dual‑track semiconductor strategy. The country is pursuing opportunities in both advanced chip designs and the production of semiconductors that power everyday appliances. She dismissed any notion that India’s ambitions in the chip space are unrealistic, asserting that demand will stay robust for components used in refrigerators, automobiles, industrial machinery and Internet‑of‑Things devices.
The minister linked the rapid expansion of artificial intelligence (AI) and data‑centre operations to a rising need for reliable power infrastructure. She stressed that meeting the electricity requirements of AI‑related facilities, semiconductor fabs and data centres will depend on the development of sustainable green‑energy sources and the reinforcement of transmission networks.
Infrastructure pipeline and investment climate
Highlighting the scale of the nation’s infrastructure agenda, Sitharaman said the National Infrastructure Pipeline (NIP) has grown to exceed $4.5 trillion, offering a wide array of investment opportunities across regions and sectors. She underscored the roles of the National Bank for Financing Infrastructure and Development (NaBFID) and the National Investment and Infrastructure Fund (NIIF) in channeling long‑term capital toward these projects.
Domestic private investment, she observed, is gaining momentum, with capital flowing into renewable energy, semiconductor manufacturing, pharmaceuticals and aircraft maintenance, repair and overhaul (MRO) facilities. The civil aviation sector, according to Sitharaman, is expanding at roughly a 16 percent annual rate, creating further prospects for infrastructure development and ancillary services.
Overall, the finance minister presented a picture of a resilient economy backed by strong fundamentals, a proactive monetary authority, and a forward‑looking industrial policy that together aim to sustain growth and attract investment ahead of the Union Budget.
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