Reforms express to run nonstop as FM Sitharaman backs GST, tax and banking overhauls

India Inc is beginning to invest and urban consumption is not a worry, finance minister Nirmala Sitharaman told ET, maintaining that there would be no holding back on economic reforms.In a wide-ranging interview just after the finance ministry said India was in a “Goldilocks situation”—not too hot, not too cold, but just right—Sitharaman said this was the outcome of 11 years of work by the Narendra Modi government. The Centre is looking to simplify the goods and services tax (GST) and income tax further, ensure the availability of critical supplies, speed up land monetisation, and strengthen regional rural banks. Atmanirbhar Bharat has shown what it an do in defence–it is beyond success: SitharamanAmendments to the Insolvency and Bankruptcy Code are also expected to be placed before Parliament soon. Banking is going through one of its best cyclical phases but more lenders are welcome, while IDBI Bank privatisation is expected this year, she said.“You have good momentum on the ground. And I hope going forward, I would think this momentum will be accentuated because the monsoon seems to come up with good news,” Sitharaman said on the health of the economy as summer rain covered the country nine days ahead of schedule. “Robust business activity is evident from strong e-way bill generation and PMI (Purchasing Managers’ Index) data.”Private investment, a key pillar of growth, is returning. “Of course, they are coming in. With all that (global situation), I think the Indian industry was also being cautious, but now I can see them moving and coming out,” she said, adding that bankers have told her that the private sector is approaching them for credit. States were also doing a good job of at tracting investment. Demand in the country’s towns and cities isn’t troubling.“I'm not very concerned about urban consumption, but since I am watching it, I will keep a close eye,” she said. Bankers are optimistic about rate transmission following the central bank’s recent 50-basis-point reduction. “Of course, there will be some time lag as banks need to handle both the lending side and the deposit side,” she said. “They have a tightrope walk to follow. It’s not as if they wouldn’t want to transmit the reduction.”Sitharaman said work would continue on improving the ease of doing business and that a lot of work has already been done on GST reforms. “I hope to finish it soon,” she said. “That would bring in a lot of difference, not just in terms of lesser rates, but also in terms of compliance,” the finance minister said. Sitharaman said industry has been widely consulted before and after the signing of trade agreements and is well-positioned to benefit from them or compete with imports.On new bank licences, the FM said she understood the RBI’s approach. “The only thing on which, if at all, I would want to say is whatever be the decision of the regulator, give licence, approve or deny licence and say no, it cannot happen. It should happen in a reasonable time,” she said. The ongoing Operation Sindoor doesn’t pose a fiscal challenge, she said.