Finance Minister Nirmala Sitharaman said the government would be keen to hear views on removing the long-term capital gains (LTCG) tax during Budget consultations, as investors raise questions about how equity investments are taxed.
Speaking at the Bloomberg New Economy Forum in New Delhi on Tuesday, Sitharaman said the debate also covered securities transaction tax (STT) and whether different asset classes should be taxed in a similar manner.
The taxation of equity investments has drawn attention from both domestic and foreign investors, Sitharaman said.
The discussions include the possible removal of LTCG tax, the role of STT in the stock market and whether different asset classes should follow similar tax treatment.
The issue is likely to be part of the discussions about the upcoming Budget, as investors continue to raise questions about the tax treatment of their investments.
Sitharaman also spoke about the flow of private capital into sectors such as renewable energy and semiconductor manufacturing.
She highlighted India’s growing focus on semiconductor chips, chip design and packaging, along with areas that support the development of artificial intelligence (AI).
India has also attracted investments in data centres, semiconductors, transmission lines, renewable energy, green hydrogen and green ammonia, she said.
The government has chosen to manufacture both advanced chips using finer nanometre technology and less advanced chips, which remain important for several parts of the economy.
On infrastructure financing, Sitharaman said the National Infrastructure Pipeline, launched in late 2019, had crossed $4.5 trillion.
She also highlighted the role of the National Bank for Financing Infrastructure and Development (NaBFID) and the National Investment and Infrastructure Fund (NIIF) in mobilising funds for infrastructure projects.
Sitharaman said India had made significant progress in building capacity across sectors over the past decade and expected this momentum to continue.
Sitharaman said domestic capital was increasingly flowing into renewable energy, chip design, biosimilars, drug manufacturing and maintenance, repair and overhaul (MRO) centres.
She also pointed to opportunities in civil aviation, noting that the sector was growing at around 16%.