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Sitharaman's Next Big Task: Why Customs Reform and the Rupee's "Natural Level" Matter

Finance Minister Nirmala Sitharaman has laid out the government's upcoming agenda. She says that after reforming income tax and GST, simplifying the customs tax system is the next big task. On the rupee's recent slide, she believes the currency will find its own natural level based on economic fundamentals. The RBI has also provided a positive outlook, raising its GDP growth forecast and lowering its inflation projection.

Key Points: FM Sitharaman on Customs Tax Reform and Rupee's Natural Level

  • Finance Minister announces customs tax simplification as the government's next major reform focus
  • Sitharaman states the rupee will find its own natural level against the US dollar
  • She highlights smuggling as a serious problem requiring modernized customs systems
  • RBI raises GDP forecast to 7.3% for 2025-26 and cuts inflation projection to 2%
2 min read

Customs tax reforms next big task, rupee to find its own natural level: FM Sitharaman

Finance Minister Nirmala Sitharaman outlines the next focus on simplifying customs tax and shares her view on the rupee finding its own natural level against the dollar.

"Customs is the next big assignment. - Finance Minister Nirmala Sitharaman"

New Delhi, Dec 6

Finance Minister Nirmala Sitharaman on Saturday said that after income tax and GST reforms, the next focus of the government is the simplification of the customs tax system.

Speaking at the Hindustan Times Leadership Summit here, the minister said that the government has moved to a “faceless” income tax system online and now, “the same virtues will have to be brought to customs”.

She further stated that smuggling of illegal goods is still a serious problem.

"We have brought down custom duties in the last two years steadily. Customs is the next big assignment," FM Sitharaman noted.

On the Indian rupee vs US dollar debate, Sitharaman said that rupee will find its own natural level, after the currently hit an all-time low of 90 against a US dollar this week.

“Rupee and currency exchange rates are sensitive issues. We raised it much better while we were in the opposition. Inflation rate was so high back then, economy was fragile then and when your currency also takes a hit, it is nobody's bright spark," she said.

Finance Minister further stated that “Look at the fundamentals of the economy, where we stand, some factors are very important which position India in a very different league. This currency debate will have to be circumscribed by those realities”.

On Friday, the rupee closed at 89.98 against the US dollar. Over the week, the currency depreciated by nearly 0.6 per cent.

Meanwhile, the Reserve Bank of India (RBI) has raised its GDP growth forecast of the Indian economy to a robust 7.3 per cent for 2025-26 from 6.8 per cent earlier, on the back of an improved outlook driven by strong agricultural prospects, GST rate cuts continuing to play out, low inflation and strong balance sheets of corporates and banks.

The RBI’s monetary policy committee (MPC) also slashed its forecast for India’s inflation rate for the financial year 2025-26 to 2 per cent -- from 2.6 per cent predicted in October due to the sharp decline in food prices and the GST rate cuts playing out.

- IANS

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Reader Comments

S
Sarah B
The focus on smuggling is crucial. We see so many counterfeit products in the market, from electronics to cosmetics, which hurt both consumers and legitimate businesses. Stronger, tech-driven customs enforcement is the need of the hour.
R
Rohit P
"Rupee will find its own natural level" – this is a sensible approach. Constant RBI intervention to prop it up drains forex reserves. With strong GDP growth and controlled inflation, the fundamentals are solid. A slightly weaker rupee actually helps our exports.
P
Priya S
While I appreciate the forward-looking statements, the immediate pinch of a 90 rupee dollar is real for the common man. Petrol, imported medicines, electronics – everything gets costlier. Hope the 'natural level' is found soon without too much public hardship.
V
Vikram M
Good to see the roadmap after GST. But implementation is key. The GST portal still has glitches. Hope they learn from those experiences and build a truly seamless customs system. Also, lowering duties must be balanced with protecting domestic industry. Jai Hind!
K
Karthik V
The economic indicators look promising – 7.3% growth and inflation down to 2% is fantastic news. This strong foundation is what will ultimately give the rupee its true strength. The FM is right to ask us to look at the fundamentals.

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