Union Finance Minister Nirmala Sitharaman recently highlighted India’s significant progress in tax reforms and digital transformation at the Third Plenary Meeting during the #FFD4 in Seville, Spain. She emphasized how these measures have not only increased revenue but also slashed compliance costs for businesses and individuals alike.
“We support international cooperation to modernise tax systems and curb illicit financial flows,” Sitharaman stated. India’s approach combines comprehensive tax reforms with a digital overhaul of tax administration, creating a more efficient and transparent system. This dual strategy has proven effective in enhancing revenue collection while reducing the burden on taxpayers.
The Finance Minister also pointed out how optimal regulation can drive innovation and stability. The Indian financial system has been designed to promote inclusivity, particularly for MSMEs, by easing credit access and lowering compliance costs. This focus on supporting small and medium enterprises aligns with the government’s broader vision of fostering a dynamic ecosystem for startups and public-private partnerships in infrastructure.
Sitharaman stressed the importance of reforming the international financial architecture to ensure greater inclusivity and equity. She called for updates to Multilateral Development Banks (MDBs) and advocated for fairer credit rating systems. According to her, MDB lending should align with long-term development goals and be backed by strong monitoring frameworks to ensure proper fund utilization.
India’s development strategy places people at its core. The government’s targeted policy interventions have lifted 250 million people out of multidimensional poverty. A key driver of this success has been the inclusive Digital Public Infrastructure (DPI), which has empowered communities across the country.
However, Sitharaman noted that national efforts alone aren’t enough. A supportive international environment is crucial for robust global growth. She reiterated India’s commitment to South-South and Triangular Cooperation, urging developed nations to increase Official Development Assistance (ODA) and provide more predictable, accessible, and concessional climate finance, especially for vulnerable countries.
“In the spirit of India’s civilizational ethos, ‘Vasudhaiva Kutumbakam’ or ‘The World is one family,’ we must unite in our efforts to drive meaningful change that benefits all,” she said. The Finance Minister acknowledged the progress made since the Addis Ababa Action Agenda but highlighted the urgent need for transformative action to address the USD 4 trillion annual financing gap for developing countries.
India’s strides in tax reforms and digital governance serve as a model for combining innovation with inclusivity. As Sitharaman’s address underscored, the path to sustainable development requires both national resolve and global collaboration.