Finance Minister Nirmala Sitharaman's exclusive interview to Network18: Full Text

Nirmala Sitharaman:

Thank you very much for giving me this opportunity to interact soon after this major reform measure has been approved by the council, and I thank every one of the ministers who attended the meeting, the states, the finance ministers, and supported it, otherwise it wouldn't have come to see the light of the day. Well, the Prime Minister did announce it from the Red Fort on Independence Day, but even about eight months ago, he called me once and had a long talk about how GST can be, you know, revamped, looked at, and only from one point of view. He said, look, both from the point of view of the process and also for the common man, the tax rates, is there a way in which we can make it simpler? So I had agreed that I will go into it and come back to him.

Then around the budget, when we were talking about many tax related issues, he reminded me about the work which has got to be done. And I assured him again that time that yes, the work is progressing and I'll come back. So sometime after the budget session was over of the Parliament, I said I'm somewhere close to giving him a proposal, which he can guide me further and so on. And then a bit later, much later, because you know the developments of May, April, when operation Sindoor had happened, and after April, things, priorities have been on very many different grounds. And when next opportunity came, I went, gave him a detailed description. He said, I just want, as I said at the first meeting, the simplistic or simplified, not simplistic, simplified way of doing business.

So I don't want small people, small businesses sitting at the computer, getting the auditor to do it. And also, like the way we did in the budget, respecting the middle class, respecting the taxpayer, respecting people who are really the ones out of their salaries giving the tax. We need to do something for the day-to-day indirect tax, which falls on every Indian citizen in some way or the other. So this tax is something which touches the lives of every citizen. And therefore, we need to be a lot more sensitive. So I went back with this comment. They did it, sharp focused it. And that's how this proposal came. And we, for the first time in GST's history, council's history, the centre's come up with a proposal.

Till now, it used to be the group of ministers, which consisted only of state ministers. Never has a centre been a part of any GOM. It's the first time, both in the case of the compensation cess, where the MOS Finance central government was the chair, to decide how to handle the closure of the compensation cess, and a comprehensive proposal as regards GST being given by the central government. So it's unique in very many ways. Every rule of the house, of the council, had to be looked at afresh, even to put the proposal. So I'm glad it went through the whole grind. Didn't ignore any rule or expectation or the law of the GST. That's gone through.

Rahul Joshi:

And taking everyone along, unanimously. At the heart of this is obviously, the common man. In fact, Moneycontrol had put out a tweet, saying that how it also impacts, it is the health of every citizen in India, to which the Prime Minister, in fact, said that it is also to do with Swasth Bharat. So what was the driving motivation behind this bill?

Nirmala Sitharaman:

See, I had to do a dredging kind of an exercise. So every item which comes under the GST, goods or services, had to be looked at, not just by the codes, not just by the names, but to regroup them from the point of view of daily use items, that which is consumed by citizens, middle class, the poor, but in particular. And then you looked at those which are going to hit the farmers, those which are going to hit the middle class, and so on. Because eventually, daily use items, or items which are necessary for this transition of India from an emerging, developing economy, to a Viksit Bharat, cannot be on the back of just the approach of, we need more development, bridges, roads, some contracts for works, and so on. But also that the aspirations of the growing families will have to be met.

So we had to regroup them in such a way, okay, this is essential for, let's say, the families, poor middle class families, of course, the rich will come in. So what do we do as a treatment for it? But even as we were talking about this, we are talking about the classification of goods and services. I, without any hesitation, will bring that example of the popcorn. Why am I saying hesitation? Because I was pilloried on it. But that tends to the problem of classification, where we brought in a system, no doubt, which was an improvement of, over the pre-GST era, where every state defined its own, and had its own rate, and so on.

So GST in 2017 was an improvement over what was earlier. But it still required some more simplification, and that's why this exercise. And then the case of the popcorn, it led to a lot of litigation, courts coming up with different kind of voices, and states losing revenue, because of the classification being different, people chose to have the higher taxed sugary chocolatey popcorn, shown in as a salted popcorn, because that has only very little tax on it. So this arbitrage, because of classification, had to be overcome.

So even as I'm grouping for families, their day-to-day items, this thought of what the classification is causing as a problem, also had to be addressed. Like that, I think it was one of the, for me, it was a fascinating exercise. It was rigorous, it took a lot of my time, and time which would have gone in for something else, but I think this was absolutely rewarding an exercise, because you brought in that temperament, which is so important, that citizen looks at these things in one particular way, revenue is not the consideration. So that helped us.

Rahul Joshi:

So now that you've done two monumental things, you've put more money into the hands of the consumer, you brought down for the middle classes, the income tax cut, and now rationalization of GST. So will it now finally sort of move the needle on consumption?

Nirmala Sitharaman:

100 percent, because there's more money given already, through the income tax cut, the rates are coming down. So the citizen now has a choice to meet his aspirations and his expectations. He cannot say, look, I have the money because the income tax is reduced, but these items are beyond my affordability. Now, now everything has come down. I'll give you this number which is important. 99 percent of all the goods and services which are touched by GST are now either in zero, or in five, or in 18. There's nothing beyond. So that one percent is what makes for the demerit goods, which popular parlance says sin goods. So that is the extent to which we have cleansed the system of anomalies, doubts, duplications, and any interpretative issues.

Rahul Joshi:

So this will also lead to higher investments, it will fire up investments as well.

Nirmala Sitharaman:

Obviously, with consumption going up, there's a potential for capacities to grow, investments to grow.

Rahul Joshi:

Now the combined tax revenue impact of this, you know, earlier your income tax cuts, and this is about 1.2 lakh crore. Do you think that there will be a certain revenue buoyancy as well in the coming years to make up for this?

Nirmala Sitharaman:

Every economic theory that one studies says that.

Rahul Joshi:

Yeah, have you seen that in the past?

Nirmala Sitharaman:

Well, at least the moment the income tax reduction happened, you heard people very clearly coming out and say, I mean, I've met up with a lot of individuals coming from different strata of the society saying, I'll have more money to send my son to this particular college. My daughter is already doing engineering. I'll be able to fund her for a higher studies and things like that. And from ordinary citizens who are leading their lives, either working in a small store or driving a car, taxi, and so on. So it has an immediate psychological effect that I can do this, which was beyond my affordability. And therefore, I think there will be a buoyancy in terms of revenue.

Rahul Joshi:

Any impact on capital spending or fiscal deficit?

Nirmala Sitharaman:

I wouldn't think. At this moment, I can say with confidence, capital expenditure of the government will not come down. It will be completed as stated in the budgetary planning time, the budget estimate time. And so with the fiscal deficit, and this is the last point of my gliding path, I will adhere to it.

Rahul Joshi:

Will petroleum products and alcohol continue to be outside the ambit of GST?

Nirmala Sitharaman:

Yes, the current proposal doesn't include it.

Rahul Joshi:

And you don't see that happening in the near future?

Nirmala Sitharaman:

Not in the immediate future.

Rahul Joshi:

Let's move to a few broader economic questions as well. With GST rationalization, inflation is likely to come down quite naturally. Does it make a case for further record rate cuts in the future? I know it's not your, but generally, directionally speaking.

Nirmala Sitharaman:

Not my domain. We'll have to see how the RBI assesses for itself.

Rahul Joshi:

September 22nd is a tight deadline. You know, are you confident you'll be able to roll this? Is the back end ready?

Nirmala Sitharaman:

Yes, the back end was mentally prepared. And many structural things have already started getting corrected, reset, and so on. It is with the agreement of these GST and related technology managing team related issues that we have had a discussion with them. And they have clearly given me the confidence that yes, they will be rolling it out on September 22nd.

Rahul Joshi:

So Rahul Gandhi, who earlier called it Gabbar Singh tax, now has been talking about one nation, one tax. On the other hand, former Finance Minister Chidambaram P. Chidambaram, he said that, you know, it is eight years too late. How do you react to all of this?

Nirmala Sitharaman:

Well, being in the opposition, I think they have to say something when the popular response has been so overwhelming for an opposition to try to take some credit out of it. But yet, with a hesitation that the credit should not be completely given to the government, it's quite understandable. But I would want them to ponder that neither could they bring it in because they couldn't win the confidence of the states, nor could they truly and literally understand how the mechanism works. After all, the GST Council has members from Congress party, finance ministers from Congress rule states are there. But I have a feeling the Congress high command, as they call it, doesn't do its homework to understand that the way in which this wonderful organization works, the GST Council.

And therefore, at one point in time, they call it Gabbar Singh tax, another point in time saying, oh, this is fine, but it should have come earlier. These are clearly statements coming from people who have not really spent time to understand how post-independence, that one institution which has been created, a constitutional body. If I'm right, this is the only one which has been created post-independence.

Rahul Joshi:

Yes.

Nirmala Sitharaman:

Is spent eight years, but has delivered so much in terms of revenue, in terms of uniting this country, in terms of making ease of doing business a reality. And it's now coming up quickly in succession within eight years for the second generation reforms. To understand it and then to comment would help the government, not straight comments, which doesn't get into the details.

Rahul Joshi:

Nirmala Ji, this has been widely hailed as one of the dramatic reforms of this government. Obviously, Dil Mange More. So, what next? You know, PM has set up two official level committees on next gen reforms. Two group of ministers have also been formed, headed by Amit Shah and Rajnath Ji. What can we expect in the coming months? What is the idea going forward? How do you look at reforms in the bigger picture?

Nirmala Sitharaman:

Quite a lot of work was done about the next set of reforms which we need to undertake, even prior to ‘24 Lok Sabha elections. And then some departments moved, like ours moved faster. There are other departments which are moving faster as well, whether it is looking at the environment related issues, sustainability related issues, opening up for private sector, sectors which have been the domain and the privy of the government. These are things where lots of action is happening. Various departments are moving. The science and technology is moving very fast. I.T. is moving very fast. I.T. as in semiconductors and other things.

So, that big area of reform, if you ask me, in which these two committees will look at, and also the committee which is headed by former Cabinet Secretary Rajiv Gauba, I expect reforms which will have to now trickle down, rather than remaining, reform remaining as a domain of only the union government. The state governments are somewhat also moving towards reforming on very many scales. But the third layer of India's democracy, the urban local bodies and the panchayats, is where the next forceful action has to move. Otherwise, the speed with which we want to move India and the aspirations to be met in India for people to live in a society, live in a country which is fairly developed, and our citizens get their aspirations met, I think we have to take the reform agenda, just not to the states, but also to the third layer.

Rahul Joshi:

As I move to discussing the GDP numbers for quarter one, just before that, another last question on GST, which is, how will you ensure that you pass on the benefit to the consumers? You know, we've seen anti-profiteering in the past. So, how do you plan to tackle this? Is there a way in which the government is looking at it? How do you ensure?

Nirmala Sitharaman:

At the moment, there isn't any particular mechanism that I can say I have. But I certainly, I am seized of the question, also coming from many citizens themselves, who are saying, it's great that you've done this, it's great that you're bringing in this kind of a drastic cut in taxes, but how will you ensure that we'll benefit from it? And how will you ensure that it's not going to disappear on the course to reach? We'll have to keep talking with industry, we'll have to nudge them, we'll have to, I'm glad in the case of the insurance sector, the public sector insurance companies have come forward to openly say that they will indeed pass the rate cuts to the citizens, those who are taking the insurance for themselves. So, I'm sure the private sector would also do it in insurance, and so with other things.

Rahul Joshi:

They're expecting them to announce that they will pass on the benefit?

Nirmala Sitharaman:

Many of them are doing.

Rahul Joshi:

A couple of them, some of them have announced. So, Q1 GDP numbers are heightening 7.8 percent at a time when President Trump said that India is a dead economy. How do you react to something like that?

Nirmala Sitharaman:

I may not be able to comment on, let's say, foreign head of the state commenting on it, but in India, one line which I keep repeating several times, probably even once when I met you once earlier when we chatted like this, it is the cynics within India who worry me. It is the naysayers within India who worry me. Assume somebody had said it, the head of state has said it. Building India together, and all of us together building India, are we going to carry those tales or stories or observations which somebody else says, and then repeat that so and so has said this, India is a dead economy, we knew it, this is happening, that's happening. India requires its citizens to be respected. They are toiling and struggling and working to build their families and their economies, their own personal family wealth and whatever.

At this time when we are trying to create more opportunities, do we need the naysayers to even borrow such observations, be it as it may that it is coming from a head of state? Do we need our own people to use these expressions? It is undermining not the government, you're undermining our citizens' efforts, and a responsible opposition, I wish I didn't repeat these lines, but I think it is, I would react only to what our people are saying rather than a head of state helps me.

Rahul Joshi:

No, five quarter high number, I think it gives us a lot of confidence.

Nirmala Sitharaman:

And also inflation coming down.

Rahul Joshi:

Yes.

Nirmala Sitharaman:

Drastically coming down.

Rahul Joshi:

Yes. But it brings us to a related point, which is on the point of tariffs. Now that you know tariffs with the US are at 50%, what is the likely impact on the GDP going forward? There are various estimates by various sort of consultancies, you know, from 10 basis points all the way to 100 basis points under predicted. Where do you see the impact really of this?

Nirmala Sitharaman:

But with the reform like this, many of that should be offset.

Rahul Joshi:

Yes.

Nirmala Sitharaman:

So it is never a situation of one fixated point. It's a dynamic situation where you're moving from one to another with newer players coming in, newer factors coming into play in this scheme of things. This one, you have the GST reforms, which is going to make people understand that they can fetch more things with the same amount of money with which they bought some amount earlier. So it is very clear that the industries have been speaking about the tariff and its impact. The government has designed something for itself. We will come out with something to handhold those who are hit by the 50% tariff from the US. This has been said earlier. I've met up with the delegations when I went to Chennai in recent past few days. I have said this there and I will repeat it. Government is working.

Rahul Joshi:

So will they be like allowed to sell in India or how do you plan to alleviate their concerns?

Nirmala Sitharaman:

No, there is a package which consists of very, very many different ways in which we want to help them. So we'll wait for the cabinet to clear it. But there is something coming to help them so that this tirade of the tariff is something which they can face. And also suddenly having to look for newer markets is also a challenge, but we'll have to help them out on that.

Rahul Joshi:

So is there a sense in the government that this could be a slightly longer haul?

Nirmala Sitharaman:

We hope not, but we really can't leave our exporters high and dry saying it's going to change sooner. We will work with them.

Rahul Joshi:

Nimala Ji, will we also continue to buy Russian oil?

Nirmala Sitharaman:

Yes, that's been made very plain and simple. Whether it is Russian oil or anything else, it's our decision to buy from the place which suits our needs, whether in terms of rates, logistics, anything. So where we buy our oil from, especially being a big ticket foreign exchange related item where we pay so much out of our highest in terms of input, we will have to take a call which suits us best. So we will undoubtedly be buying.

Rahul Joshi:

Another question about, you know, the officials of the Trump administration have been using really hurtful language against India, saying that we are Brahmins for profiteering at the expense of ordinary, ordinary Indians, or calling the Ukraine-Russia war, Modi's war, or us as Kremlin's laundromat. How do you see all this? I mean, how do you react to something like this?

Nirmala Sitharaman:

Very much the same principle as I said earlier. It is one thing, it can be hurtful. It is one thing for a foreign government head of state or an official or anybody to say all that. And the global diplomatic world is astonished that that kind of an expression is being used against India. And that will have people in the diplomatic arena to respond or to deal with.

But what hurts me more is when those very expressions are being justified in India. Oh, don't you know, don't you, I mean, you, you know, dirty unwashed Indians, you don't understand what this expression means. This is how, you know, this is explained. Who wants these explanations from Indians? Who actually wants us to know better? And who are these people explaining to us? You know, this expression is used in this context. I'm outraged by that. I don't want explanations to justify that.

Whether I'm going to have to deal with them, stand up and challenge them or retort is a different story. But Indians quoting those words and telling us, oh, you dirty Indians, you don't know this colonial justification of the language that has been used against Indians, against such countries, which have come out of its colony and from its empire and stood up to build its own country with its own self-confidence. And even now, when we are talking about Atmanirbhar, it's not just in terms of producing everything in your country. It's also about being Atmar, what do you call?

Rahul Joshi:

Self-reliance.

Nirmala Sitharaman:

No. Self-respect. As much as you want everything produced in India for Atmanirbhartha, you should have something of a self-respect. If somebody is saying all of us in one way should respond to it, rather than have a few of us justify it by saying, don't you understand it? Are you a part of the imperialists? I'm outraged more by that.

Rahul Joshi:

Yeah, the opposition picking up this and, you know, making it their own narrative. Like dead economy was picked up by Congress.

Nirmala Sitharaman:

Yes. And even for this, Brahmins are the ones who are benefiting out of it.

Rahul Joshi:

Explaining as Boston Brahmins.

Nirmala Sitharaman:

Yes, Boston Brahmins. Oh, you Indians, you don't understand this Russian oil purchase is to help Brahmins to benefit of it. And you are being fooled. Exactly the same divide and rule principle which the British used here, which the imperialists used here. And even today you have the friends of the imperialists telling us, no, no, you know, the expression Boston Brahmin is this and not that. Who damn cares? I'm sorry. Who damn cares? I want Indians to think for ourselves. I want those Indians who are now defending that language to get up and say, we are free from you all now for over 75, 80 years. We'll mind our business. We'll take care of ourselves. Refrain from using these words. Should have been that voice. That not being the voice and to teach us saying, don't you know the meaning of this expression? Outrageous.

Rahul Joshi:

Today we've got to know why Nirmala Sitharaman gets angry. Moving on to economy, any plans to liberalize FDI or FPI regulations further?

Nirmala Sitharaman:

I do not want to give a headline, but certainly we are looking at every aspect of reform.

Rahul Joshi:

How do we, this is probably the right time to assure foreign investors to invest in India. What are some of the steps that we should take that would give them this confidence? I mean, this one was a big one in itself, but going forward.

Nirmala Sitharaman:

First thing I think are institutions such as parliament should debate issues, should question government on the proposals, on the policies, on government's actions. That gives confidence to people saying India's democracy actually literally discusses these issues. Without that, the government can go about doing what is right for the public. But the institution of the parliament is not being used for its prime purpose. Why is it important? It gives a feeling that both the opposition and the ruling parties are talking on issues. Instead of holding placards and standing in the house, if there is a meaningful discussion, it will convey a lot about the policy strength. That is one thing.

Second are regulatory institutions. And I've said this before, but I'll repeat it here. Regulatory institutions should not go to the extent of micromanaging. I want businesses to do their businesses. They have powerful boards which run them. And the regulator, in consultation with the stakeholders, should allow them to function. Of course, keep a watch and do a soft touch regulation. If regulators across the board, I'm not talking just of the finance domain regulators, all over, should have an open-minded approach, a soft touch approach. Above all, not micromanage businesses.

Rahul Joshi:

Private investment has been a topic of discussion. How do we revive animal spirits, you know, for the private sector to invest? This has been a discussion that we've been having over the course of many interviews. And you've been also exhorting the private sector. How do we get about?

Nirmala Sitharaman:

I think, to be fair to them, they are moving in. And they are doing, they are taking decisions about how they want to expand.

Rahul Joshi:

You see a significant change.

Nirmala Sitharaman:

I see a significant change. And I see that enthusiasm now in wanting to understand how things will move from the industry. And I'm sure they are conscious that opportunities lie in India and they should do this.

Rahul Joshi:

How would you react to S&P's, you know, India's sovereign rating by S&P, which has gone up? High time, would you say?

Nirmala Sitharaman:

Yes. And it is, I think, as a result of a lot of work done by the Department of Economic Affairs, the chief economic advisor. They have been persistent with talking with them, giving them adequate data-based information. And their conversations have actually today shown us the result. And I'm glad that they're doing it. They should continue doing it with other agencies also. Because with our growth being what it is, with our fiscal macroeconomic fundamentals being what they are, with our inflation being under control, with our foreign exchange growing, with our stock market being so buoyant, it is difficult to understand how parameters of similar and comparable nature elsewhere attract a much better rating, whereas ours don't. And conversely, parameters which are worse than ours seem to be having better rating, just can't explain it. So I think the work of the DEA and the CEA is well cut out in this regard. They will have to work with agencies.

Rahul Joshi:

Nirmala Ji, you're right about all the macro indicators looking up. But revenue growth for corporate India has remained tepid. It's at a seven quarter low of 3.7%. How do you explain that? GDP on one hand growing at 7.8%. What really accounts for this?

Nirmala Sitharaman:

I think it's also a question of how they're deploying their resources and how they're earning out of it. Businesses will also have to look at the way in which their risk taking capacities can increase. And that's what is going to be the prime mover in terms of revenues for businesses. But that's a business call. It's not for me to say.

Rahul Joshi:

Nirmala Ji, India and China are now mending sort of fences. So, right now it is at the level of resuming the flights and giving visas to each other. But what could be the next steps? How could we make the Chinese markets more accessible to Indian companies? There is, of course, a huge deficit of 100 billion dollars here. So how do we do that? I mean, what are the next steps?

Nirmala Sitharaman:

There's just a lot of work to be done in that area. There's no hiding it. We need to have trade conversations, market access conversations, non-tariff barrier conversations with the Chinese. Unless we do that, and unless there is a true engagement and not a procrastinating engagement, you may talk as much as you want on these issues. I've done it myself. And to have a conclusion arrived at takes a lot of time with the Chinese. Market access is something which has not been realized despite our almost a decade long engagement with the Chinese. In between, everything had come to a halt. But on both these issues, there should be meaningful conversations. Otherwise, the very products that we want to export to China go through different destinations to China. But why can't it go directly?

Rahul Joshi:

And will it also be reciprocal? I mean, Press Note 3 prevents investments from China to India. So would you look at doing something about that as well?

Nirmala Sitharaman:

As it is, I think in one or two cases, particular cases, we have relaxed some of them. And in those sectors where their technology has come in, and the technicians and also the experts had to come to actually see the projects through, we have not allowed these experts to come. That has now changed. In some sectors, people are coming in. The projects are already on the ground.

Rahul Joshi:

So India will be open to that idea.

Nirmala Sitharaman:

Of course.

Rahul Joshi:

Nirmala Ji, you've ushered in the boldest of reforms. I say this in every interview that we do. Because you do corporate tax cut. I mean, that was a phenomenal sort of move. Then after that last budget, we have income tax rates going down. Now, GST2, as I call it. So, one thing that we probably haven't seen enough is on private disinvestment. What would you say to that? You know, you did sell Air India. But after that things have been slow.

Nirmala Sitharaman:

You'll see action in that also.

Rahul Joshi:

This year?

Nirmala Sitharaman:

Yes.

Rahul Joshi:

Oh, that's great news. Any deadline for strategic stakes sale in IDBI Bank?

Nirmala Sitharaman:

No, I think the Secretary has already, DIPAM Secretary has already spoken about it. IDBI is moving quite fast. And I expect it to be concluded this…

Rahul Joshi:

This financial year. Okay. And any more banks which could then be looked at after this?

Nirmala Sitharaman:

I wouldn't say any more banks. I'm not negating anything.

Rahul Joshi:

Right.

Nirmala Sitharaman:

But yes, more disinvestments.

Rahul Joshi:

More disinvestments. Okay. So, we've seen that since June this year, the yield on 10-year bonds have risen 30 basis points since June, you know, to more than 6.5%. Are you concerned about rising borrowing costs?

Nirmala Sitharaman:

Yes. I wouldn't say I'm concerned, but I'm observing it. It is not affordable. And also at a time when interest rates are otherwise low.

Rahul Joshi:

Yes.

Nirmala Sitharaman:

Bond yields becoming unsustainably high has a big bearing on the government, not just our union government. States are also up against odds and getting affordable, you know.

Rahul Joshi:

Also your fiscal map?

Nirmala Sitharaman:

My fiscal map is, as of now, absolutely fine.

Rahul Joshi:

Of course. So, Nirmala ji, we are again near an election. Bihar elections are coming up. And before every elections, we have seen all political parties dole out freebies. And we've discussed this in previous, you know, encounters as well. Does this worry you? State after state promising welfare schemes, doling out freebies. And how does it all really add up for a country like ours?

Nirmala Sitharaman:

I think I'll speak for all finance ministers. It is a very, very difficult thing. To have a scheme approved and also budgeted for is not wrong. And I would approve of that. Because that at least takes the view of the legislature. And also makes it public about how they are financed. And therefore also brings in that responsibility to keep your revenue generation equally attended to. But what most often happens, not so much with Prime Minister Modi's leadership, but I can say what generally happens is you give away a promise. Once you have to come to fulfil it, you're searching and scrambling for resources. And if you're an opposition-ruled party, it is very quickly arsenal in your hand to say central government is not giving me money. That's the biggest unsustainable argument. I'm more tempted to say bogus argument. Because you give a promise, you win the election, you come to power and then after that you're not able to fund it.

Rahul Joshi:

That's happened in a lot of cases.

Nirmala Sitharaman:

Yes, why would you want to throw the blame at somebody else, particularly the Union government?

Rahul Joshi:

Yes.

Nirmala Sitharaman:

So this kind of sort of recklessness in dealing with public finance has got to be discouraged. There's no doubt on it.

Rahul Joshi:

Nirmala Ji, India holds about $227 billion of US Treasury securities. It also holds a lot of gold in its reserves. Should we diversify away from US Treasuries for reserves?

Nirmala Sitharaman:

To some extent, I think the Bank of India has already started doing it. I wouldn't want to diverge more by saying how are they doing it. But I think Reserve Bank has taken a very considered decision and they've also done by purchasing gold. So I think the bank is competent and they're taking a fine call on it.

Rahul Joshi:

One more question was on the decision to ban online gaming, which came as a surprise to many, especially after many years when people had poured in a lot of money in that business. What was the thinking behind this? How do you assure people of consistency in sort of decision making at a time like this?

Nirmala Sitharaman:

What is the time? What is so special about the time like this?

Rahul Joshi:

What I meant was that a lot of investments have come into this.

Nirmala Sitharaman:

No doubt. We have not banned games which are for recreational purposes. We are still online games for these things which are not banned. It is only when you start betting with money. And why is it? Not because we want to say we don't like it. It's a question of the number of people who came to say families are getting absolutely shaken up. Their monthly bills are shooting up and children cannot be controlled from the temptation. And many children. In fact, I wouldn't mind even saying this. There was a finance minister who once met me in a very different context. And he narrated an incident of his own family where his own grandson, who's a very good person. The child is a very good child. Well groomed and well brought up. Used his credit card for just one day for some other purpose of a family's genuine buying requirement. He helped them because children are very savvy. Post that one day, one another day, he picked up the card and said, I want to just do something. They said, all right, please. Because they never suspected this child as, you know, into games and into betting and things like that. The boy used the card and played and gave back the card. Again, probably he did it two or three times more. Phenomenal increase in the bill that month. And that's when the grandfather sat up and said, what's going on? Let's check up. And this grandson told him right in front of him that it was all free. I didn't go into any money playing game.

So the methodology is say it's free, you get in. And for the duration of time that you've played, some kind of a charge is put. And again, tempts you to go into another round and the round and so on. So the child is, adolescent child is under the impression that he's playing a free game. But he ended up paying through his nose. So that is where, that's a classic example. But many people approached us, the PMO and so on and said, this is ruining our country, ruining our youth. Please do something. That's where this bill has come.

Rahul Joshi:

Okay. No, I understood. The rupee is at an all time low against the dollar. Does it concern you?

Nirmala Sitharaman:

It is, I've said this and I'm going to have to repeat it. It is only against the dollar that the rupee is highly volatile. Whereas rupee is not affected similarly by other currencies. So, and there are countries in emerging markets and even in developed countries, whose currencies against the dollar are weakening. So it is an issue on that aspect and at that level about the volatility as a result of the strengthening dollar. It's not rupee getting weakening. I know I've been trolled immensely for saying this, but this is the truth.

Rahul Joshi:

Thank you. Nirmala Ji, one last question. For profitable companies with over 1000 crore and over 2% of their profits go into CSR. Now at a time like this, when MSMEs are facing a problem because of tariff issues, et cetera, is there any thought to take a relook at this for a little while?

Nirmala Sitharaman:

Nothing before me as yet. If there's anything I'll tell you, but there's nothing.

Rahul Joshi:

All right. Nirmala Ji, thank you so much for your time. Thank you for patiently answering all our questions. Very candid and heartiest congratulations on yet another big reform, GST 2 or rationalization of GST. Thank you so much for being with us.

Nirmala Sitharaman:

Thank you very much.