Sitharaman stays silent on LTCG, STT changes ahead of Budget
Finance Minister Nirmala Sitharaman remains tight-lipped on LTCG and STT changes ahead of the Union Budget, while highlighting massive investment opportunities.
Union Finance Minister Nirmala Sitharaman has maintained a cautious stance regarding potential changes to Long-Term Capital Gains (LTCG) tax and Securities Transaction Tax (STT). Speaking at the Bloomberg New Economy Forum 2026, she noted that with the Union Budget preparations already underway, it would be premature to comment on specific tax measures.
Acknowledging the intense debate among domestic and international investors regarding the taxation of various asset classes, the Finance Minister indicated that the government remains open to receiving feedback and perspectives from the market.
Economic Stability and the Rupee
Addressing concerns over the Indian rupee, Sitharaman clarified that the Reserve Bank of India (RBI) is primarily focused on managing excessive volatility rather than attempting to pin the currency to a fixed level. While she acknowledged the depreciation of the rupee over the last 18 to 24 months, she attributed the pressure largely to external global factors.
She reinforced confidence in India's economic position, citing:
- Strong foreign exchange reserves.
- Robust economic fundamentals.
- A steadfast commitment to fiscal discipline and macroeconomic stability.
The Finance Minister emphasized that while the government will maintain fiscal prudence, priority will continue to be given to essential spending in welfare, education, and healthcare.
A Practical Push for Semiconductors and AI
Defending India's semiconductor ambitions, Sitharaman rejected claims that the nation's goals are unrealistic. She highlighted a dual-track strategy: pursuing advanced chip technologies while simultaneously focusing on the high-demand market for semiconductors used in everyday items like refrigerators, automobiles, industrial machinery, and Internet of Things (IoT) devices.
Furthermore, she linked the massive expansion of Artificial Intelligence (AI) and data centres to the urgent need for power infrastructure. To support this technological surge, she stressed the importance of:
- Developing sustainable green energy sources.
- Investing in robust electricity generation.
- Expanding transmission lines to meet the growing requirements of AI-related infrastructure.
Massive Infrastructure and Investment Opportunities
The Finance Minister painted a picture of a booming investment landscape, noting that the National Infrastructure Pipeline has expanded to over USD 4.5 trillion. She pointed to key institutions like the National Bank for Financing Infrastructure and Development (NaBFID) and the National Investment and Infrastructure Fund (NIIF) as vital drivers for mobilizing long-term capital.
Sitharaman also observed a significant rise in domestic private investment, particularly in high-growth sectors such as:
- Renewable energy
- Semiconductors
- Pharmaceuticals
- Aircraft Maintenance, Repair, and Overhaul (MRO) facilities
She specifically highlighted the civil aviation sector, which is currently growing at a rate of approximately 16 per cent, signaling vast untapped potential for infrastructure and service-related investments.