Sitharaman Touts ‘Reform Express’, Defends Fiscal Record

New Delhi: Slamming the Opposition, Union Finance Minister Nirmala Sitharaman on Wednesday said that reform is not happening out of compulsion, but out of conviction, with clarity, confidence and commitment as India is riding on the reform express under the leadership of Prime Minister Narendra Modi. Pointing out at the economic reforms in the country, she also said that the Finance Bill 2026 has focussed on several measures for common man, youth, women, farmers, middle class, cooperatives, small business houses among others.

While replying to the debate at Lok Sabha, Sitharaman said that the Finance Bill, 2026, rests on five key principles — trust-based tax administration; ease of living for citizens; empowering farmers, MSMEs and cooperatives; making India stronger global business hub; and seamless trade facilitation and customs reforms. “Besides, the bill has also emphasised the capex-led expansion for infrastructure and private investment, employment and skilling initiatives like Yuvashakti, and support for MSMEs through credit and incentives,” she said.

The bill, however, seeks to give effect to the financial proposals of the central government for the financial year 2026-2027. After the finance minister’s reply, the bill with 32 government amendments was passed through voice vote in the Lok Sabha. Sitharaman, however, elaborated the Finance Bill 2026 in detail, saying that trust-based tax administration is the central pillar of the bill, which intended to reduce unnecessary hardship for honest taxpayers. “Besides this, other measures like manufacturing, industry, and agriculture will benefit from production-linked schemes, industrial corridors, irrigation, and rural infrastructure in the country,” she said.

The finance minister further said that this bill aims not only to support these sectors to improve liquidity but also reduce the compliance burden and give them the opportunity to have greater contribution towards the larger economy. “Inclusive growth and social protection are strengthened through welfare schemes, direct benefit transfers, and support for vulnerable populations,” she said.

Hitting out at the fellow opposition members on fiscal balance, she said the fiscal deficit is projected to come down to 4.3 per cent of GDP in FY27, from 9.3 per cent in FY21, and the country's debt-to-GDP ratio is on a declining path and is lower than most major economies in the world.

Rejecting their charge on the middle class who have been left out in the Budget for 2026-27 fiscal year, the minister also listed out measures like reduction in TCS rate on payments made under liberalised remittance scheme or LRS for foreign education and medical treatment. "Also, TCS on overseas tour packages have been slashed to 2 per cent from 20 per cent earlier," she said.

Elaborating further on the bill, she also said that customs reforms have been proposed by altering many provisions with the objective to promote trade facilitation. Referring to the rationalisation of tariffs on gifts and personal imports, she also said passengers will have far less to worry about when they land in India. “I receive a lot of day-to-day complaints of disputes at airports. The relief as part of the finance bill is aimed for the middle class, not for high net worth individuals,” she said.

On debt burden, she said that since 2008, the world’s overall debt burden has increased 41 per cent, whereas India has reduced its total debt burden by 4 percent of its GDP. She also drew comparison with the US and China’s figures, saying that India’s combined figure, the debt-to-GDP figure, is 83 per cent approximately and it is also on a declining path, that too after Covid.

On cess, she also said that in the last six-year period, (2019-2024/25), the cumulative utilisation of cesses has exceeded the collection. “Rs 15.14 lakh crore was collected, while Rs 15.97 laks crore was sent to states under various schemes. Repeatedly raising doubts that you put it in the divisible pool, not realising that only 40 per cent will reach you that way, is just making a lot of noise without understanding the details,” she added.