Finance Minister Nirmala Sitharaman has said the government will consider concerns over equity taxation amid foreign investment outflows, while calling for an amicable settlement of the ongoing dispute within the Tata Group. Speaking at the Financial Express Leadership Awards, Sitharaman said the taxation structure had remained unchanged even when foreign inflows were at record highs in 2023, but acknowledged that circumstances had since changed.
She also urged the Tata Group's leadership to resolve the dispute internally, saying the matter was sensitive and required considerable business and commercial acumen. Sitharaman on Tata Group disputeResponding to a question about allegations made by Rahul Gandhi and whether the government should intervene in the ongoing Tata Group dispute, Sitharaman said the matter required a delicate approach.“I think these are very delicate matters, and matters where a lot of commercial and business acumen will have to work.
Business cordiality will have to work,” she said, according to the Financial Express Leadership Awards.“So I won't readily say there is—however serious the issue may be—and I know the brand value of Tata, the contribution that the Parsi community has made to make Tata a huge global brand,” she said.“I also know the expanse of activity in which Tatas are invested.
This is a very critical component of the Indian economy, and therefore it has to be amicably settled among themselves,” the Finance Minister added.“They should talk it out to make sure that it comes back quickly to some normalcy. It cannot be spilling out like this in public,” Sitharaman said.“Given the maturity of that leadership, we would like to have this scene settled sooner.
That's the view,” she added. Asked whether she would bring the two sides to the table to reach a compromise, Sitharaman said the matter was sensitive.“That's where I said it is rather a sensitive issue. It's not something I would want to comment on quickly,” she said.
Sitharaman on taxation and foreign flowsSitharaman also acknowledged concerns over India's taxation structure amid foreign investment outflows, saying she would consider the issues raised by market participants.“The taxation structure was what it is today even in 2023, when inflows were at record highs,” she said.“Today, the circumstances have changed,” the Finance Minister added.“FII outflows have happened, and voices of concern are louder,” she said.“I will consider all this,” Sitharaman said.
She also recognised calls for equity investments to receive support similar to that extended to the debt market, particularly as India seeks to sustain economic growth of more than 7%.“At a time when growth is very important, and to sustain 7% plus growth, we need capital, especially equity,” she said.“We also have this voice that equity needs the kind of support given to the debt market.
I recognise this voice,” Sitharaman added.