Nirmala Sitharaman becomes first woman to be full-time finance minister
The rise of Sitharaman, 59, who joined the Bharatiya Janata Party (BJP) a little over a decade ago, is an example of women breaking the glass ceiling to be in the driving seat of Asia’s third-largest economy.Updated: Jun 01, 2019 06:55 IST
In the first Narendra Modi-led National Democratic Alliance (NDA) government, Nirmala Sitharaman was defence minister, the first woman to hold that post since former Prime Minister Indira Gandhi, who was in charge of the portfolio when she was head of government.
In the second one — ministerial portfolios were announced on Friday — Sitharaman is the finance minister, and she is once again the second woman to hold the post after Gandhi, who held the portfolio when she was PM.
The rise of Sitharaman, 59, who joined the Bharatiya Janata Party (BJP) a little over a decade ago, is an example of women breaking the glass ceiling to be in the driving seat of Asia’s third-largest economy.
According a person close to Sitharaman, on the first day in office, she was overwhelmed by the prospect of occupying the post held by Arun Jaitley, the BJP’s chief fire-fighter and consensus-builder when it came to ground-breaking reforms. Like Jaitley, who asked not to be in the cabinet on account of his poor health, Sitharaman will also have to follow the consensus model on matters of indirect taxes, which are decided by the Goods and Services Taxes (GST) Council, a federal body. Decisions are jointly taken by the Union and state finance ministers in the Council. After assuming office, Sitharaman took a briefing from senior bureaucrats on the challenges facing the economy.
A Jawaharlal Nehru University alumna, Sitharaman joined the Modi cabinet on May 2014 as the minister of state for commerce. In that capacity, she soon acquired a reputation for being a tough negotiator and successfully put across India’s point of view in forums such as the World Trade Organisation. She was promoted to a cabinet minister’s rank with the defence portfolio in September 2017.
Sitharaman will bring her knowledge of economics, her considerable political acumen, and her administrative skills to a tough job. Her immediate challenge is to revive the slowing economy, although external factors such as slower global growth are contributing factors for this.
The new finance minister will have to give shape to the full-year budget for FY20, amid slowing revenue collection and surging welfare spending needs. And she will have to work with the trade minister and the external affairs minister to stave off any undesirable fallout on India from the US-China trade war.
Sitharaman will also hold the corporate affairs portfolio.
The income support scheme for small and marginal farmers rolled out in the interim budget in February-- Pradhan Mantri Kisan Samman Nidhi—was to cost the exchequer ₹75,000 crore in 2019-20. With the expansion of the scheme to all farmers on Friday, it will end up costing ₹87,500 crore. At the same time, receipts from direct tax revenue in FY19 are believed to have fallen short of the revised target of Rs 12 trillion. This may require reworking the budget numbers.
The interim budget for 2019-2020 announced in February estimated a 3.4% fiscal deficit for the current fiscal, the same as the upwardly revised estimate for 2018-19, from an earlier projected 3.3%. According to experts, the final fiscal deficit figure for 2018-19 could be higher when government accounts are finalised.
Further simplification of GST, recapitalising state-run banks and solving the liquidity crisis in the non-banking sector are among the key tasks before the new finance minister.
First Published: May 31, 2019 23:31 IST