New Delhi: Reforming India's customs duty regime, by lowering rates on selected goods, increasing transparency, and reducing officials' discretion, will be the next major economic reform push, finance minister Nirmala Sitharaman said on Saturday.

Speaking at the HT Leadership Summit 2025, the minister said the proposed reforms would be similar to the reforms and simplification in the Income Tax Act, which will be administered by a new statute starting April.

"There are quite a few things to do," the minister said in response to a question on the next set of reforms being planned by the government.

"It is the complete overhaul of the customs. We need to have customs a lot more simplified for people to feel that it is not too tiresome and cumbersome to comply with," Sitharaman said, adding that rules have to be made more transparent.

The finance minister said that income tax reforms sought to address taxpayer grievances about the administration of the law on the ground, which was perceived to be "agonising". Assessments are being done under a faceless regime to eliminate personal biases.

The proposed reforms will be comprehensive and entail customs duty rate rationalisation. "We have brought down customs duty over last two years steadily. But in those few items where our rates are considered to be over the optimal level, we have to bring them down as well. Customs is my next big cleaning-up assignment," Sitharaman said.

Growth, consumption and rupee

The minister highlighted that the Indian economy faced several challenges in recent years, including covid and the subsequent supply chain disruption due to conflicts in Europe.

With lower taxes, consumption will get a boost, she said. "We have seen the second quarter growth. I think, overall this year, growth will be 7% or beyond."

India's economy beat expectations in the September quarter with 8.2% growth, which prompted chief economic advisor V. Anantha Nageswaran to upgrade his growth forecast to "the north of 7%" for the full year, up from the 6.3-6.8% projected in the Economic Survey presented in January.

The minister said that the trend of disinflation does not worry her and that macroeconomic factors will adjust to their appropriate levels, including the rupee-dollar exchange rate.

The rupee slipped to an all-time low of 90.46 against the dollar on Thursday before pulling back to close at 89.98. The domestic currency settled at 89.96 on Friday.

To a question on how the public perceives rupee fluctuation as a reflection of economic strength or weakness, the minister acknowledged that the National Democratic Alliance (NDA) too had raised the issue of rupee depreciation in Parliament and outside when it was in the Opposition, but now the economy's fundamentals tell a different story.

Sitharaman said one must look at India's growth rate and its global position among other major economies. "Some factors are very important that position India differently today, and as a result of which, this currency debate has to be circumscribed by those realities."

Policy priorities

The government's strategy to revive the economy, sustain growth rate and make the country a developed nation by 2047 included strong investments in infrastructure sector, income tax and GST rate relief and continuous reform of the regulatory architecture.

The minister said she would prefer to make a medium-term assessment of how the consumption trend is shaping up after the income tax and goods and services tax (GST) rate cuts this year, rather than making an assessment based on data for one or two months.

Sitharaman said the central government was willing to help states restructure their loans for better fiscal performance, while cautioning against borrowing to fund freebies.