Govt Open to Suggestions on LTCG Tax Removal During Budget Consultations: FM Sitharaman

New Delhi, Oct 14 (KNN) The government is open to receiving suggestions on the removal of long-term capital gains (LTCG) tax during consultations for the upcoming Union Budget, Finance Minister Nirmala Sitharaman said.

Speaking at the Bloomberg New Economy Forum in New Delhi on Tuesday, Sitharaman noted that investors had raised concerns over the taxation of capital gains, the securities transaction tax (STT) and the treatment of different asset classes.

She said the Budget preparation process had begun and it would not be appropriate to indicate at this stage which proposals the government might consider.

Rupee Volatility And Fiscal Discipline

On the rupee, Sitharaman said the Reserve Bank of India (RBI) would continue efforts to contain excessive volatility rather than target a particular exchange rate.

She acknowledged that the rupee had depreciated significantly over the past year, attributing much of the movement to global factors, adding that India's strong macroeconomic fundamentals and foreign exchange reserves provided support to the country's stability.

The finance minister reiterated the government's commitment to fiscal discipline while maintaining expenditure on key areas such as welfare, education and healthcare.

Semiconductors, AI and Infrastructure Investments

On the semiconductor sector, Sitharaman noted that India was pursuing opportunities in both advanced chips and less sophisticated semiconductors used in everyday products, including automobiles, refrigerators and industrial machinery.

She said the government was focused on building capabilities across chip design, manufacturing and packaging, while also preparing for growing demand from artificial intelligence (AI) and data centres.

Sitharaman emphasised that the expansion of AI infrastructure would increase electricity requirements, making investment in renewable energy and transmission networks important for ensuring reliable and sustainable power supply.

She also said the National Infrastructure Pipeline had crossed USD 4.5 trillion, creating investment opportunities across sectors and regions. Institutions such as the National Bank for Financing Infrastructure and Development (NaBFID) and the National Investment and Infrastructure Fund (NIIF) were helping mobilise long-term capital for infrastructure projects.

The minister said domestic private investment was gaining momentum, with capital flowing into renewable energy, semiconductors, pharmaceuticals, biosimilars, drug manufacturing and aircraft maintenance, repair and overhaul (MRO) facilities.

India's civil aviation sector was growing at around 16 per cent, she added, pointing to further investment opportunities in aviation infrastructure and related services.

(KNN Bureau)