From trust to tax transformations: Reform narratives in the Budget speeches

When India’s finance minister stood before Parliament in 2014, few could have predicted the quiet revolution that would follow. Over the next 10 years, the country’s Union Budget speeches would tell a story not of incremental tweaks, but of a fundamental reimagining of the relationship between state and citizen. Tax administration in India is viewed with suspicion and as one of heavy-handed enforcement;  the last decade tells the story of the emergence of a philosophy that has treated taxpayers not as subjects of compliance, but as partners in nation-building. As we dissect the key themes and language across the past 10 Union Budget speeches, the realisation is apparent, that tax predictability is not merely a technical aspiration but a cornerstone of India’s growth story and is critical for fostering investor confidence and sustaining economic momentum.

2014-15: Restoring Credibility

The 2014-15 Budget presented by the former late finance minister Arun Jaitley marked the beginning of a deliberate shift towards a predictable tax environment. He addressed the concerns raised globally about retrospective taxation and stated that although the sovereign retains the right to legislate retrospectively, such authority must be exercised with extreme caution. This reassurance, combined with measures to strengthen advance rulings and promote quicker resolution of disputes, signalled an intention to restore policy credibility. At the time India faced large volumes of pending tax cases and investor uncertainty, and the Budget sought to reverse these trends by affirming the government’s commitment to stability and clarity in tax administration.

2015-16: Advancing a Non-adversarial Tax Regime

The FM advanced the philosophy of non-adversarial taxation. The Budget reaffirmed that taxpayers are participants in nation building and must be treated with accuracy, fairness, and respect. Structural simplification, including the abolition of the wealth tax and a movement towards lower corporate tax rates aligned with fewer exemptions, aimed to reduce complexity and administrative friction began to take shape.

2016-17: Asserting Faith in the Citizenry

The Budget articulated trust as an explicit pillar of governance. The FM reminded Parliament that money with the government belongs to the people and that there is a sacred responsibility to spend it prudently. Tax reform initiatives in that year emphasised a reduction in litigation, a lighter compliance burden, and a preference for co-operative engagement with taxpayers. Confidence grows when citizens perceive the state as operating with restraint, transparency, and integrity.

2017-18: Strengthening Transparency

FM Jaitley’s emphasis on fairness and clarity underscored the belief that transparency strengthens the quality of national economic data and supports the long-term formalisation of the economy. The government’s broader modernisation agenda, including expanded digital infrastructure and greater traceability in transactions, complemented this message.

This was the year in which India brought in GST by way of a Taxation Laws (Amendment) Act, 2017—the first of only three such Acts seen in India, signalling a need to take immediate action without waiting for the traditional Budget season. 

2018-19: Honouring the Honest Taxpayer

The 2018-19 Budget speech emphasized a philosophy of rewarding honesty (imandari ka utsav) and building taxpayer confidence through transparency and simplification. This reflected a deliberate attempt to shift the relationship between the state and citizens from suspicion to trust, where transparency in resource allocation and direct benefit transfers reduce corruption and reinforce confidence in governance. Simplified schemes such as presumptive taxation for small traders and professionals are presented as evidence of faith in taxpayers, with the finance minister noting that “41% more returns were filed” under these measures, demonstrating increased voluntary compliance. These developments reflected a maturing fiscal architecture that rewarded compliance and prioritised transparency in the use of public funds.

2019-20: Transition to a Technology-driven Trust System

FM Nirmala Sitharaman’s speech placed significant emphasis on prioritising the interests of taxpayers. This approach was reinforced through measures such as faceless e-assessments, designed to eliminate personal interaction which strengthened impartiality, reduce the scope for discretionary conduct and align the system with international best practices. The simplified verification framework for startups reflected the same philosophy of taxpayers first. The 2019-20 Budget marked the beginning of a technologically transformative phase in India’s tax administration for taxpayers’ convenience.

In perhaps what was most telling of the resolve of the government to improve taxpayer sentiment, in December 2019, the Taxation Laws (Amendment) Act, 2019, was passed, which inter alia slashed tax rates for companies and introduced a globally competitive tax rate of 15% for new manufacturing in India. 

2020-21: The Taxpayer Charter

The FM proposed the statutory Taxpayer Charter in the Budget, an important commitment to respectful and rights-based administration. It affirmed that the government seeks to protect citizens from harassment and to frame interactions between taxpayers and the administration around clear procedural guarantees. Through the Transparent Taxation platform, the government introduced both faceless assessments and faceless appeals. This transformation signalled to citizens and investors that predictability and objectivity were now embedded principles of Indian tax governance.

2021-22: Creating Certainty through Institutional Reform

FM Sitharaman introduced further institutional reforms intended to strengthen taxpayers’ rights. She announced the rationalisation of the reassessment framework, which reduced the reopening period from six years to three years except in serious instances that required high-level approval, which led to predictability and reduced the possibility of arbitrary action. The establishment of a faceless Dispute Resolution Committee and an expanded use of pre-filled returns reinforced the government’s commitment to reduce friction, improve administrative convenience, and honour the time and effort of law-abiding taxpayers. By raising audit thresholds for digital transactions and introducing pre-filled returns, the government endeavoured to reduce taxpayers’ compliance burdens.

The Taxation Laws (Amendment) Act, 2021, was perhaps a legislative move to address the aftermath of India’s losses in international tribunals in the Cairn and Vodafone disputes on the issue of taxes on offshore indirect transfers. By nullifying the retrospective application of tax on indirect transfers, the Act sought to exorcise the “ghost of retrospectivity” that had cast a shadow over cross-border transactions since 2012, reaffirmed India’s intent to position itself as a predictable and attractive destination for foreign capital.

2022-23: The Emergence of Trust-based Governance

The Union Budget marked a significant evolution in India’s fiscal philosophy. It introduced the Updated Return provision, which permits taxpayers to voluntarily rectify omissions within a two-year window. By encouraging self-correction rather than punitive enforcement, the measure reflects confidence in taxpayer integrity and signals a departure from adversarial proceedings. The speech focussed on enhancing India’s attractiveness as an investment destination.

2023–24: Reducing Compliance Burdens through Jan Vishwas

The speech highlighted the broad government initiative embodied in the Jan Vishwas reforms. These reforms reduced tens of thousands of compliance requirements and decriminalised a significant number of provisions across various sectors. The Income Tax Department’s approach of selective and risk-based scrutiny complemented these reforms, ensuring that enforcement resources were used efficiently while honest taxpayers experienced reduced intrusion. The continued simplification of digital procedures and the faster processing of returns created an environment in which voluntary compliance naturally improves.

2025-26: Trust as a Foundation for a New Tax Law

The common principle the Budget for 2025-26 was trust first and scrutiny later. FM Sitharaman underscored this approach by noting that the success of taxpayers voluntarily updating their incomes, which is a clear indication that trust-oriented policy measures encouraged compliance without coercion. The announcement of a new, clearer and more direct income tax law positioned India for the next phase of tax modernisation, aiming to simplify the system and reduce ambiguity.

Reflecting on a Decade of Putting Taxpayers First

The Budget speeches from 2014 to 2025 chart a coherent narrative-transformation of placing taxpayers at the heart of fiscal policy. Furthermore, by concrete enforcement of the transparency, certainty and trust philosophies, the administration has prioritised taxpayers’ interest to ensure ease of function for the taxpayers. What perhaps commenced as reassurance against unpredictability evolved into a comprehensive governance model. 

While recent legislative reforms underscore the policy intent to foster tax certainty and improve investor sentiment, the broader disputes landscape tells a more complex story. High-value controversies continue to dominate the docket, driven by aggressive assessments, interpretational ambiguities, and protracted litigation cycles. Despite policy-level efforts to signal predictability, the persistence of legacy disputes and the emergence of new contentious issues, particularly in areas like transfer pricing and capital gains, reflect the structural challenges in achieving true stability. This dichotomy highlights the gap between reform-oriented messaging and the practical realities of India’s tax administration.

(Butani is Managing Partner, BMR Legal Advocates;Jariwala is a Partner with the International Tax & Transfer Pricing team, BMR Legal Advocates; with inputs from Mansi Mathur, Associate, BMR Legal Advocates. Views are personal.)