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Finance minister Nirmala Sitharaman’s advocacy at the Hindustan Times Leadership Summit 2021 of consistency in taxation policies, Centre-state synergy and a lightened compliance burden for businesses should reassure India Inc of the Centre’s reform intent. These were on top of the government’s agenda, she said, adding that it would strengthen the revival of our economy.

As preparations for the next budget are underway, one can assume that these will serve as key guiding principles. On taxes, specifically, businesses need clear policies to eliminate all ambiguity, which makes space for disputes over liability interpretation. The Centre’s withdrawal of its retrospective tax claims signals an approach that addresses pain points. Other measures have also been taken that have helped improve India’s climate for private investment. Indeed, there are signs that this factor may not be an economic drag for much longer. But before we sigh in relief over that, we must ensure that weak consumer demand does not stall a largely supply-driven recovery. Our economy needs to get going on every measure for a sustainable return to a high-growth path.

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