Shortly after Nirmala Sitharaman returned to the helm as India’s Finance Minister for the second straight term came the good news for states – the ministry announced tax devolution to the state governments, releasing an installment of Rs 1,39,750 crore.
While the Congress dismissed the disbursal as a rule rather than a favour, the fact that Nirmala Sitharaman is back in the saddle shows that despite the opposition’s barbs at her, PM Modi trusts her to push ahead with economic growth. It is also an across-the-board message that his government’s policies will continue despite coalition concerns.
Under Nirmala Sitharaman as the Finance Minister, India has become the world’s fifth-largest economy and the fastest-growing one as well. The post-Covid economic policies have helped the green shooting of the economy. Other factors like the UPI going global, tax rebates, GST rate cuts, decriminalisation of Company Law and ease of doing business also worked in her favour.
One of the key pillars of the Narendra Modi 3.0 government will naturally be the economy. There are concerns over job generation, and on this count, Nirmala Sitharaman must deliver a package. She also needs to ensure more FDI and ease of starting a business.
Another challenge, of course, is to strike a balance between consumption and investment, and for this, all eyes are on the full budget Sitharaman will present in the upcoming Budget Session. The middle class is hoping for tax cuts and benefits.
But with the power comes the responsibility. Sitharaman will need to balance fiscal demands and also boost spending. In a coalition era, she may need to balance concerns of the alliance partners and move away from fiscal conservatism.
She will also have to deal with two pressing issues — the cryptocurrency law and the electoral bonds judgment of the Supreme Court which has got some entities in the corporate sector worried.
That’s a lot of balls in the air. But as Sitharaman told a young admirer once: “The moment you have recognised the ups and downs, half the bridge is crossed.”
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