[{"2024":"1","headline":"STEERING THE ECONOMY THROUGH ALL ODDS","profile":"ON JULY 23, when she tabled Budget 2024-25 in Parliament, Nirmala Sitharaman became the first finance minister to present seven consecutive Union Budgets, beating the distinction of six consecutive Budgets (1959-1965) held by Morarji Desai. He was then the finance minister in the Cabinet of Prime Minister Jawaharlal Nehru. On June 12, Sitharaman took charge of the finance ministry for the second time, with the responsibility of providing a fiscal roadmap for Prime Minister Narendra Modi’s dream of a Viksit Bharat by 2047. The foundation towards the goal has been laid over the past couple of years though. In fact, Sitharaman will likely go down in economic history of the country as the only finance minister under whose tenure the Indian economy grew over 8% even as the global economy suffered massive growth pangs and inflation spiralled. India has beaten all estimates to register an annual GDP growth of 8.2% in FY24. The number showcases the robustness of the Indian economy, says Nirmala Sitharaman after announcing the FY24 GDP numbers. Sitharaman, expressing confidence that the momentum will continue in the third term of the Modi regime.
From a peak of 5.1% in 2022 in the wake of the Russia-Ukraine war, retail inflation in June, too, is near the Reserve Bank of India’s (RBI’s) 4% target.
The G20 finance track is another initiative that Sitharaman successfully steered in the last one year. The finance track has been vocal on reforms at multilateral development banks (MDBs). India pitched for capital adequacy reforms of MDBs, expected to yield an additional lending capacity of $200 billion in the next decade, which would help bridge the divide between the rich and the poor nations.","byline":"Ashutosh Kumar"},{"2021":"1","headline":"The Intrepid Firefighter","profile":"Thirty six hours after Prime Minister Narendra Modi imposed the nationwide lockdown in March 2020, the first cabinet minister to hold a press conference was Nirmala Sitharaman. The entire country was eagerly waiting for her to unveil the government's thought process as equity indices had crashed a day before and the economy was about to take a body blow due to the pandemic.
Both "lives and livelihoods" had to be taken care of, Finance Minister Nirmala Sitharaman tells Fortune India one-and-a-half years into the pandemic and many more initiatives later. India's 28th finance minister recalls that phase and 18 months after that as the most challenging period of her career.
"We do not want anyone to remain hungry," Sitharaman said at that eagerly awaited press conference on March 26, 2020, the second day of the nationwide lockdown that began at 00:00 hours on March 25. With the announcement of the ₹1.70 lakh crore Pradhan Mantri Gareeb Kalyan Yojana, or PMGKY, a direct cash and food grain scheme, Sitharaman made the government's resolve clear. One part of the fund was for cash transfer to the needy. The other was for providing them food security.
The jury for Fortune India's Most Powerful Women awards was impressed with the far-reaching impact of Sitharaman's immediate initiatives on the vast majority of Indians.
"On livelihood, it was a sorry thing for any Indian to see migrant workers walking with families and possessions. The government immediately combined nearly 16 central schemes and addressed districts where these workers had migrated," says Sitharaman. About 25,000 migrant workers had already reached over 118 districts, she says, adding the central government issued instructions that the schemes must get saturated, that is, the entire amount exhausted in those districts before October 2020.
The food grain scheme, originally meant to end in June 2020, is now in its fourth phase, ending in November. It provides 80 crore beneficiaries under the National Food Security Act additional five kg food grain per person per month, free-of-cost, over and above the usual entitlement. Government has so far allocated nearly 600 LMT food grain under PMGKY's four phases. Nearly 82.76% of the allocation had been lifted till September 15, 2021, indicating demand as well as need for the scheme.
Weeks after providing immediate succour to the poor, in May 2020, the prime minister announced the ₹20 lakh crore Atma Nirbhar Bharat package to reverse the impact of the lockdown on the already slowing economy. The finance minister explained the details of the package in a series of press conferences. She also announced second and third legs of Atma Nirbhar packages in October and November last year.
The long process to put the economy back on track had started in earnest.

Handholding MSMEs
The next focus was on rescuing the many micro, small and medium enterprises (MSMEs) from the impact of the lockdown. For this, the government launched the Emergency Credit Line Guarantee Scheme (ECLGS) under the Atma Nirbhar Bharat Package. The scheme has helped over 1.15 crore businesses meet operational costs and restart businesses amid disruptions brought about by the pandemic.
Loans under the scheme had crossed ₹2.86 lakh crore as on September 24, 2021. The government has extended the scheme till April 31, 2022, or till guarantees for ₹4.5 lakh crore are issued, whichever is earlier. "I have expanded it with another ₹1.5 lakh crore just to make sure that anyone who still wants it can get it," says Sitharaman, who takes pride in monitoring the scheme down to the bank branch level. The extension of ECLGS was part of the ₹6,28,993 crore stimulus announced by Sitharaman on June 28. The other measures announced that day included credit guarantee scheme for microfinance institutions for lending up to ₹1.25 lakh crore to about 2.5 million borrowers, a scheme for the tourism sector, additional fertiliser subsidy to farmers and infusion of liquidity in Export Credit Guarantee Scheme over five years to strengthen export insurance cover by ₹88,000 crore
That's not all. In fact, even as the first wave of Covid-19 peaked in September last year, the ministry came out with measures to tap pent-up demand ahead of the festive season. These included novel ideas such as encashing unused LTC benefits and reinstatement of festive advance to government employees.
In November came Atmanirbhar Bharat 3.0 with schemes such as the Atmanirbhar Bharat Rozgaar Yojana promising establishments which register with EPFO subsidy for new employees. The announcements covered the launch of the second phase of ECLGS, including for the 26 sectors identified by the K.V. Kamath Committee, ₹1,46 lakh crore production-linked incentives for ten champion sectors, ₹18,000 crore for PM Awas Yojana, tax relief for home buyers/developers and ₹65,000 crore for fertiliser subsidy.

Covid, Slowdown Double Whammy
When coronavirus smashed healthcare infrastructure to smithereens the world over and engulfed the global economy, India's position was even more vulnerable. Its economy had started slowing down way back in FY2017. From a peak of 8.2 per cent in FY2016, GDP growth had come down to 6.8 per cent in FY2019, and touched a low of 4 per cent in FY2020.
It was between this slowdown and the incoming pandemic that ace BJP spokesperson Nirmala Sitharaman took over the reins of the finance ministry in May 2019. She was a member of the National Commission for Women during the Atal Bihari Vajpayee government and held key portfolios like commerce and industry, corporate affairs and defence in the Modi 1.0 regime. Her years in public life (she joined BJP in 2008), her academic training (MA in Economics) and professional exposure as senior manager (Research & Analysis) at PWC, were soon put to test, all together.
Sitharaman had to start firefighting just after the din of BJP's stellar electoral victory in May 2019 general elections subsided and the economy slipped into the sub 5% GDP growth territory in subsequent quarters. Her first game-changing decision in October 2019 was a mega cut in corporate tax rates in order to make industry more competitive.
This was followed by the launch of a special window for funding stalled affordable and middle income housing projects, with a corpus of ₹25,000 crore, in order to benefit at least
1,500 housing projects comprising at least half a million units stalled for over a decade. The government also set the ball rolling for strategic disinvestment of oil giant BPCL in November 2019.
By this time, the 'most stony' adversary was preparing to rear its ugly head in Wuhan, the capital city of Central China's Hubei Province. By mid-December of 2019, Wuhan had become the epicentre of the pandemic, which spread to over 200 countries. The disease came to India at the end of January 2020, culminating in an unprecedented lockdown, leading to massive decimation of the economy. Under the heavy weight of the pandemic and the lockdown, Indian growth rate further plummeted — GDP contracted 24.43% in Q1 of FY2021 and 7.3% in entire FY2021.
The relief and stimulus measures, spearheaded by the finance ministry under Sitharaman, seem to have turned the tide, though. The economy grew 20.1% in Q1 of FY2022, though on a low base of last year. The second quarter of FY2022 is also widely expected to throw up a decent GDP growth number.

Ease of Doing Business
Another important initiative which stands out in terms of its wide-ranging impact is increase in speed of income tax refunds by the Central Board of Direct Taxes (CBDT). Amid the pandemic, these refunds have brought succour to a large section of the society. As per the CBDT data, the government issued refunds of more than ₹2.62 lakh crore to 2.38 crore taxpayers between April 1, 2020, and March 31, 2021. This is 43.2% more than ₹1.83 lakh crore in corresponding period of the previous financial year.
The year 2021 will also go down in history as the year when India finally buried the ghost of retrospective tax demand which had led to major international litigations and dented India's image as an investment destination. Late Pranab Mukherjee, the former finance minister and the architect of the measure, used to often remark that despite its criticism, the retrospective tax law brought by him had not been overturned. However, on August 5 this year, Sitharaman introduced the Taxation Law Amendments Bill, 2021, for withdrawal of retrospective amendments to tax laws made though the Finance Act of 2012. Rules under the law have been notified. The affected parties are likely to use the provisions to settle legacy tax demand disputes with the government. The amount paid or collected in these cases shall be refunded.
There is no doubt that the period since the onset of the pandemic has been tumultuous for those in public life and especially for those in charge of the country's economic policy. Between the first press conference after the announcement of the lockdown on March 26 and now, the finance minister has been leading India's valorous fight against the pandemic. The second wave of Covid-19 has subsided, India has given over 100 crore vaccine doses and GDP growth is back on track.
Pushing against economic whirlwinds ever since taking over as finance minister, Sitharaman unwinds with classical music – Indian, mostly centred around Lord Krishna, and sometime western. It's in music that she finds her solace and peace of mind.","byline":"Ashutosh Kumar"},{"2022":"1","headline":"Sitharaman’s Economic Rescue Act","profile":"

What She Did

Inflation Control

Banned wheat exports, reduced central excise on petrol and diesel by ₹8 and ₹6 per litre, respectively.
Gave LPG subsidy of ₹200 to Ujjwala Yojana beneficiaries.
Reduced customs duty on raw materials/intermediaries for plastic products.
Cut import duty on select raw materials for steel.
Imposed export duty on select steel products.
Notified duty free import of crude soya bean, sunflower oil for two years.

Revenue Augmentation

Hiked import duty on gold from 10% to 15%
Imposed special additional excise duty of ₹6 per litre on export of petrol and ₹13 per litre on export of diesel.
Imposed cess of ₹23,250 per tonne on crude oil.

Infrastructure

Allocated ₹7.5 lakh crore for capex in FY23.
Ensured mega allocation to sectors like highways, railways.

No other finance minister has had to face the kind of challenges that have come the way of Nirmala Sitharaman. She inherited a slowing economy with low consumption and demand. GDP growth had plummeted from over 8% in FY16 to 6.5% in FY19. It subsequently touched 3.7% in pre-Covid FY20. Then came the mother of all crises, Covid-19, delivering a body blow to the economy. GDP contracted 6.6% in FY21, the second year of her stint.
That was the period when Sitharaman, along with her team, would burn the midnight oil to track implementation of the ₹20 lakh crore Atma Nirbhar Bharat package. Officials say credit guarantee schemes, specifically for MSMEs, were accorded top priority. Sitharaman reviewed bank-wise disbursements under the scheme every evening. The package played a key role in pulling the Indian economy out of trouble. “Going through the pandemic and immediately after that, India ensured that no one remains hungry even during the severest lockdown,” Sitharaman said on the sidelines of the G20 meeting of finance ministers and central bank governors in July.
In 2021, just when things were looking up, the second wave of Covid-19 struck, threatening the nascent recovery. This time, however, lockdowns remained localised. It did impact GDP, though. Growth was 4.1% in fourth quarter of FY22. In past one year, macroeconomic challenges have grown manifold, aggravated by Russian invasion of Ukraine. Led by rise in global commodity prices, inflation started rising in India in December last year and touched 7.79% in April in the wake of supply disruptions caused by the war. Rising interest rates in U.S. and roll-back of post-Covid-19 liquidity led to massive flight of capital from emerging markets. As a result, rupee has crashed to a record low and was at 79.91 per dollar on July 27. “Monetary tightening in advanced economies, particularly in U.S., tends to cause foreign investors to withdraw funds from emerging markets. Foreign portfolio investors have withdrawn about $14 billion from Indian equity markets in FY23 so far,” Sitharaman told Lok Sabha on July 18. The outlook is grim. With U.S. inflation hitting a new high of 9.10% in June, the Federal Reserve may opt for hundred basis points increase in policy rates, triggering further flight of capital.
This means the fourth year of her term has brought additional challenges of managing growth amid high inflation, depreciating rupee and rising current account deficit. But Sitharaman and her team have been swift in dealing with the new risks. Immediately after the off-cycle policy rate increase by RBI on May 4, the ministry announced fiscal measures to control inflation. On May 21, Sitharaman announced a cut in central excise on petrol and diesel by ₹8 and ₹6 per litre, respectively.
The decisions fuelled concerns the government will breach the fiscal deficit target. It needed to think out of the box as lower revenue would mean compromising the ₹7.5 lakh crore capital expenditure plan, a cornerstone of post-Covid recovery. On July 1, it announced revenue augmentation measures. It increased import duty on gold from 10.75% to 15% to ease pressure on current account deficit due to gold imports. It also imposed a special additional excise duty of ₹6 per litre on export of petrol and ₹13 per litre on export of diesel. This is apart from special additional excise duty of ₹6 per litre on export of aviation turbine fuel and cess of ₹23,250 per tonne on crude oil. Some of these steps were partially rolled back a few days later as oil prices fell.
That said, macroeconomic uncertainties will persist till the geo-political situation improves, global inflation cools off and U.S. Fed begins paring rates. Till then, the 28th finance minister of the country will have to tread with caution.","byline":"Ashutosh Kumar"},{"2023":"1","headline":"Revving Up Growth Engine","profile":"On July 23, International Monetary Fund raised its 2023 growth forecast for India by 20 basis points to 6.1%. This is likely to make the country the world’s fastest-growing big economy at a time when almost all big countries are growing in low single digits amid headwinds such as runaway inflation and sky-high interest rates. This is no small achievement for the person at the helm of it all—Finance Minister Nirmala Sitharaman—who has been deftly steering the Indian economy through one of its most difficult phases in decades. After all, she inherited a slowing economy in 2019 with GDP growth touching 3.7% in FY20, only to be battered further by the pandemic (GDP shrunk 6.6% in FY21). The seeds of India’s stellar performance over last few quarters were sown in the way Centre designed its response to Covid-19. To avoid inflation, the relief measures gave minimal demand push and instead focused on supply-side reforms (to push growth) and bringing relief to the poorest of the poor. This standout strategy was distinct from the entire western world. It spared India the scourge of runaway inflation of the kind that is breaking decades-old records in west. Still, food and retail inflation averaged over 6% in FY23, mainly due to Russia-Ukraine war that disrupted supplies and triggered a commodity price spiral. RBI, too, started raising rates in May last year. This presented a new challenge—ensuring fast growth amid rising inflation/interest rates and restricted exports on account of global slowdown.
Sitharaman’s efforts to steady the economy hinged on implementing a massive programme for building public infrastructure and spending on welfare of those at the bottom of the pyramid. After ensuring absorption of ₹7.5 lakh crore capital outlay in FY23, she allocated ₹10 lakh crore under the head for FY24. She is front-loading spending to ensure that its multiplier effect kicks in as quickly as possible. In April and May this year, government capital expenditure was ₹1.68 lakh crore (17% of FY24 Budget estimate), significantly up from ₹1.07 lakh crore in April and May last year. The aim is to crowd in private sector investments, an economic engine that has remained largely silent over the last couple of years. Chief Economic Advisor V. Anantha Nageswaran says private sector investment revival is already visible.
While doing the heavy lifting, government did not lose sight of inclusive development goals. Anticipating the need to ensure a healthy fertiliser supply chain in the wake of the Russia-Ukraine war, it enhanced FY23 fertiliser subsidy to ₹2.55 lakh crore from original allocation of about ₹1 lakh crore. Urea prices remained unchanged throughout the year. Other initiatives in last one year include additional relief to small and medium enterprises, facilitation of jewellery exports and pushing credit offtake. In order to sustain growth and help stressed sectors, the government, in August last year, approved enhancement in limit of the Emergency Credit Line Guarantee Scheme from ₹4.5 Lakh crore to ₹5 Lakh crore. The additional amount was earmarked exclusively for hospitality and related sectors, which were struggling even two years after the pandemic. Government had sanctioned close to ₹3.75 lakh crore under the scheme till March this year.
Conscious that the economy needed heavy government spending, Sitharaman initiated several revenue augmentation measures as well. One such step involved utilising opportunities arising out of the Russia-Ukraine war in the form of high crude oil prices. With effect from July 1 last year, government imposed a cess of ₹23,250 per tonne on crude oil. The reason was windfall gains by domestic producers as they sell crude oil to domestic refineries at international parity prices. The cess did not have any impact on retail prices of petroleum products. Here, too, special care was taken of small and medium players—those whose annual production of crude oil in preceding financial year was less than two million barrels were exempted from the cess. Government kept the levy dynamic during the year, adjusting it to movement in crude oil prices. It also imposed a cess of ₹6 per litre on aviation turbine fuel. The measures generated additional revenue of ₹58,750 crore in FY23.
Then, in the middle of last year, gold imports surged, putting pressure on current account deficit. Government increased customs duty on gold from 10.75% to 15%. Also, in a move likely to push consumption, the finance minister announced further simplification of the concessional tax regime with zero tax on annual income up to ₹7 lakh.
The efforts have borne results. GDP grew 7.2% in FY23 and India remains one of the fastest growing major economies in the world. It replaced U.K. to become the fifth-largest economy. The country is no longer content with its target of becoming a $5 trillion economy. It has now set its sights on growing into a $30 trillion economy by 2050. There will be short-term challenges along the way. The imminent one, of course, is inflation, which is far from over and will continue to test the finance minister’s skills.","byline":"Ashutosh Kumar"},{"2025":"1","headline":"Navigator Extraordinaire","profile":"In 2019, when the BJP-led National Democratic Alliance (NDA) came back to power for a second consecutive term, Nirmala Sitharaman became the first full-time woman finance minister almost after five decades of former Prime Minister Indira Gandhi holding the post as additional charge during 1969-70. With the BJP back in power for a third term in 2024, Sitharaman has made a record of tabling eight consecutive Budgets, surpassing the six presented by former finance minister Morarji Desai between 1959 and 1964. But Sitharaman’s tenure as finance minister transcends the mere tally of the number of Budgets or the longevity of the term. She has managed to establish a distinct identity for the Ministry of Finance—a ministry that has its ear to the ground, and swiftly addresses the needs of the economy based on feedback from stakeholders. So, whether it’s the reduction in the corporate tax rate, or implementation of the Covid stimulus in 2020, or the ongoing consumption blues in the economy, the rule book has been the same—listen to concerns, design requisite policy interventions, and implement them without delay. Even while juggling with one macro inferno after another, the ministry under Sitharaman kept the process of disinvestment—Air India being one of the key achievements—and reforms alive over the past six years, ensuring the country remains on course towards its goal of a $5-trillion economy. Prompt policy action amid emerging macroeconomic situations touching a wide spectrum of stakeholders—corporates, MSMEs, states, and people at large—remained the key reason behind her No. 1 spot in Fortune India’s Most Powerful Women in Business list between 2021 and 2024. It’s no different this year. Meanwhile, Sitharaman continues to douse the macro conflagrations. Amidst the latest tariff war, the government, according to sources, is working on a support package for exporters in the wake of U.S. President Donald Trump’s retaliatory tariffs kicking in. Interestingly, immediately after Trump won the race for U.S. presidency after a hyperbolic campaign based on protectionist tariffs to insulate the American economy, the ministry had started studying the duty structure on U.S. imports. Her handling of the finance ministry is all about identifying an incoming issue and offering a solution. The mega tax dole of nil tax on annual income of up to `12 lakh has moved 15 million taxpayers out of the tax net and left `1 lakh crore as surplus in the hands of the people. The move is expected to boost consumption in the economy. ","byline":"Ashutosh Kumar"}]

Multi-faceted reforms

PM’s Independence Day roadmap: The reforms season is back with GST 2.0