Nirmala Sitharaman has earned the distinction of being the longest-reigning Finance Minister with an unbroken term. During this time, she has led numerous discussions on the Indian economy’s robustness and growth prospects during times of adversity, on the overhaul of the banking sector, and the understated changes she has implemented over her six-year tenure.
Sitharaman has a confident outlook for the future, asserting ‘We possess significant potential for growth. I foresee numerous chances for our business endeavours to develop.’. Moreover, on a larger scale, the team is aware of the need to increase the number of trade agreements and to encourage enhanced participation in an array of sectors.
Their strategy includes making efforts to ensure that banks accommodate the needs of the industry and comprehend the necessity of offering credit solutions that meet the unique demands of varying segments. Sitharaman believes that these goals, once achieved, will completely eliminate any concerns regarding growth.
The past eleven years have witnessed many significant changes. Solely within the finance department, considerable reforms have been introduced since 2014. Some of these transformations include the introduction of the Insolvency and Bankruptcy Code (IBC) and the Goods and Services Tax (GST) during the first term.
In her second term, Sitharaman continued the trend by focusing on budgetary transparency and accounting-related matters. She also noted the increasing rate of digitalisation in the administration of public finance, which she believes has significantly improved the efficiency of financial operations.
About five years ago, the government merged several public sector banks. Reflecting on that decision, Sitharaman expresses satisfaction with the current state of these banks. She regards the banks’ present state as the ‘best phase’ and encourages them to leverage this stage to provide as much credit as they can.
She observed that many of the banks have high cash reserves beyond the Capital to Risk (Weighted) Assets Ratio (CRAR). Sitharaman advises against hoarding these resources and instead suggests that it should be allocated to those in need. The provision of credit, according to her, is an essential responsibility of the banks.
Although the final outcome is yet to be determined, Sitharaman assured that intense work is being carried out. As she discussed the compensation cess due to end on March 31, 2026, she shed light on the proposal to replace it with a differently named cess, potentially related to clean energy.
She acknowledged potential controversies that may arise from the issue of dispersion. Sitharaman revealed that a Group of Ministers (GoM) is currently investigating these matters. She noted that even the imposition of the cess under GST was initially an anomaly, a situation already highlighted during the 2021 Budget.
Regarding the Vodafone issue, Sitharaman communicated that the department’s position is unambiguous. The Minister of Communication firmly states that he does not anticipate a duopoly. According to him, the market should remain free and open to any number of participants.
Sitharaman supported the Minister of Communications’ stance, proclaiming that the government is working on the foundation of these principles. She shared his belief that the industry should not be dominated by very few parties.
Responding to inquiries about the 8th Pay Commission, she stated that both the Terms of Reference and the members’ names are yet to be confirmed but assured that the necessary announcements would be made in due time. All these actions and proclamations contribute to Sitharaman’s overall perspective, highlighting the emphasis on fluidity, interdependency, and innovation.
Throughout her tenure, Sitharaman has firmly believed advocate for growth and resilience within India’s economy, despite the challenging times. Major reforms in the finance sector, efficient digitalisation, and restructuring within the public banking sector are accomplishments that reflect her leadership vision.
Furthermore, the proposed changes like alternate trade agreements, accessibility in more sectors, and adjusting financiers’ approach cater the expectations of varied industries, reflect the forward-thinking strategic outlook of the Finance Minister. The focus remains on ensuring progress, maintaining transparency and fostering a free market environment.
Sitharaman’s vision, guided by the principles of fairness and inclusivity, extends beyond the present. From the resolution of outstanding issues like Vodafone and the 8th Pay Commission to the impending changes in financial policies, her articulation indicates a comprehensive future-oriented approach. With such vision, Sitharaman’s tenure continues to transform India’s economic landscape, building a foundation for future growth.