Union Budget: Nirmala Sitharaman -- India’s First Full-Time Woman Finance Minister Steering The Economy Through Waves Of Covid

With the fresh surge in Covid-19 cases throwing up new challenges, it will be wait and watch as the finance minister is set to present her fourth Budget on February 1 this year

Finance Minister's Profile: Nirmala Sitharaman, who has been steering the ship of India's economy as the Union finance minister through the choppy waves of the pandemic, has her work cut out, with an economy that is just back on its feet and yet not out of woods ever since Covid hit the world in early 2020.

Now, all eyes are set on the Finance Minister as she will present her fourth budget on February 1 amid the third wave of the pandemic.

Nirmala Sitharaman is the first full-time finance minister of the nation. In the past, it was only former Prime Minister Indira Gandhi who led the Finance Ministry, and that, too, as an additional portfolio for a shorter duration. Moreover, during BJP’s second term, Nirmala Sitharaman has also been charged with an additional portfolio of the Corporate Affairs Ministry.

Making way to the corridors of power

Nirmala Sitharaman has emerged as one of the most trusted lieutenants of Prime Minister Narendra Modi's, remaining a rare staple of his Cabinet across two terms. Initially, she was the Minister of State with independent charge (Commerce & Industry). However, she soon ascended to the defence ministry as the first full-time female defence minister in September 2017 and has helmed one of the ‘big four’ ministries ever since. The position of finance minister fell vacant after former Finance Minister Arun Jaitley, who had served in the post for most of Modi’s first term and was viewed by many as his mentor, cited health concerns and opted out of the new Cabinet, clearing the path for her to shatter yet another gender barrier and ascend the steps of North Block as India’s first full-time female finance minister.

Born on 18 August, 1959 in Madurai, Sitharaman grew up in a middle-class family in Tamil Nadu. Her father, Shri Narayan Sitharaman was an employee in the Indian Railways, while her mother Savitri Sitharaman was a homemaker. Sitharaman did her schooling from Madras and Tiruchirappalli and completed her BA in Economics from Seethalakshmi Ramaswamy College in Tiruchirappalli. Further, she pursued masters from Jawaharlal Nehru University (JNU) in 1984. Also, she has done a PhD in dissertation on Indo European textile trade. She is also an alumnus of London School of Economics.

Before coming to politics, Sitharaman worked in the corporate sector after earning a masters degree from JNU. In JNU, Sitharaman came in proximity to Parakala Prabhakar and got married to him in 1986 and later moved to London where she joined the British Broadcasting Corporation. She came back in the 1990s and turned into an educationist.

Tryst with politics

She was nominated to the National Commission for Women during the National Democratic Alliance (NDA) regime under Atal Bihari Vajpayee and  joined the BJP in 2008 and became the party spokesperson the next year. In 2014, she became a member of Parliament in the Rajya Sabha as a BJP candidate. As a member of the Rajya Sabha, Sitharaman did not contest the 2019 Lok Sabha elections.

Initially seen as a emergency replacement for the venerable Mohan Parrikar, Sitharaman’s trial by fire soon arrived in the form of the Rafale deal with major allegations being thrown by the Opposition before the crucial 2019 elections. As defence minister, Sitharaman fiercely defended the Modi government against allegations of corruption and put up strong arguments in public and Parliament. She ultimately became one of the poster children of BJP’s eventual triumph in the issue, with the 2019 Lok Sabha election result cementing the victory.

Sitharaman was also a member of the committee tasked with preparing the BJP's manifesto for the elections. In January 2019, Congress leader Rahul Gandhi took a dig at Sitharaman, saying that PM Modi “got a woman to defend him” on the Rafale deal debate in Parliament. She seized the opportunity and went on a political rampage, milking the comment for all it was worth, a reminder of her years as the national spokesperson during BJP’s Opposition years.

Navigating the economy through third wave

As finance minister, Sitharaman released her maiden Budget on July 5, 2019, which also became the last pre-Covid Budget. In the Budget session, she considered the tax relief offered by Piyush Goyal to the salaried class in the interim Budget. Although she didn’t make any major changes to the taxation waiver given by Goyal for those earning up to Rs 5 lakh annually, but she increased the surcharge for those with an annual taxable income of over Rs 2 crore, signalling her approach towards finding a balance of increasing taxation while sparing the lower income groups. In a big ticket announcement,the finance minister in 20219 also slashed corporate tax rates for domestic companies and new manufacturing companies to stir up the economy.

Repeated tweaks in the GST rates, including many a roll-back, are the symptoms of this continued crusade of the finance minister. The next Budget was presented in 2020, but was soon lost in the chaos of Covid as the world plunged in a cesspool of lockdowns and economic earthquakes.

Two years and three waves later, another Budget is scheduled three weeks from now, as the economy struggles to keep pace amid third wave of Omicron hitting the nation.

With India targeting to become a $5-trillion economy by 2025, the focus will remain on economic growth and employment generation. According to the government’s statistics department, the economy is expected to grow at 9.2 per cent in FY22, lower than the 9.5 per cent projections made by the International Monetary Fund and the Reserve Bank of India. The initial indicators are not as negative as many feared during the first wave, however, there are worrying signs. The World Bank has highlighted the  return of inflation due to supply chain disruptions related to Covid-19 and deficient demand.

India Ratings lowered India’s GDP growth projection for January-March 2022 by 40 basis points (bps) to 5.7 per cent. For FY22, the ratings agency has revised its growth forecast by 10 bps to 9.3 per cent. Moreover, the repeated pandemic waves have always seem to time themselves in a period of economic hope and revival, and have continued to cast a shadow over India’s economic recovery.

Against all odds, the minister will have to maintain a focus on the long-term drivers as well. Increasing revenue, boosting employment, disinvestment, rationalisation of import duties for raw materials, micro small and medium enterprises, agriculture and start-ups with a focus on unicorns are likely to be the drivers of the upcoming Budget, according to news agency IANS. Going by the agency report, the minister is unlikely to wind up the stimulus package, announced in the wake of the deadly Delta variant of Covid last year, besides a road map to the path of fiscal consolidation is expected.

Even as most businesses are still struggling to recover from the impact of the pandemic, Sitharaman will have to walk a tightrope between encouraging revival and sustaining government’s ambitions. Political impact aside, the cost of ambitious schemes such as universal health care, aatmanirbhar defence sector, and developing self-reliance in fields such as semiconductor manufacturing are daunting even for economies in a better state of health.

As the new surge in Covid-19 cases throw up several challenges with cross-currents and conflicting objectives, it will be a wait and watch for the finance minister who shall certainly be praying for calmer seas in the journey ahead.