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Informist, Wednesday, Mar. 25, 2026

 

--Lok Sabha passes Finance Bill 2026 

--Sitharaman: India's debt level better placed than most developed economies 

--CONTEXT: Sitharaman replying to discussion on Finance Bill in Lok Sabha
--Sitharaman: Centre alone cannot control states' debt level 
--Sitharaman: Finance Bill aims to improve liquidity, cut compliance burden 

 

NEW DELHI – The Lok Sabha passed the Finance Bill 2026 on Wednesday. Following this, the Rajya Sabha will discuss and return the money bill, which includes amendments to effect tax changes announced in the Budget for 2026-27 (Apr-Mar).  

 

The provisions in the Finance Bill aim to improve liquidity as well as lower compliance burden for taxpayers, Finance Minister Nirmala Sitharaman said in the Lower House while replying to the discussion on the bill. The government aims to improve ease of living through the proposed amendments to the bill, Sitharaman added. 

 

To support the middle class, the bill has proposed cutting the tax collected at source to 2% from 5% on remittances under the Liberalised Remittance Scheme for purposes of education or medical treatment, Sitharaman said. The bill has also proposed cutting tax collected at source to 2% from 20% on overseas tour package--including expenses for travel, hotel stay, boarding or lodging or any such similar or related spending.

 

The bill proposes a tax holiday till 2047 for foreign companies that provide cloud services to customers globally by using data centre services from India. But the conditionality is that these companies must provide services to Indian customers through an Indian reseller entity. It also proposes providing a safe harbour of 15% on cost in case the company providing data centre services from India is a related entity.

 

Members of the Lower House, while discussing the bill, raised questions about India's debt level and the government's measures to lower it. In her response, the finance minister said the general government's debt--that takes into account central and state governments' debt--is near 83% of GDP, which is lower than that of most advanced economies. China's debt level is 88%, while that of Japan is 250%; the US' debt is also over 100%, Sitharaman added. 

 

At a time when the debt levels of most economies are rising, the Centre has delineated a roadmap to lower its debt, Sitharaman said. The Centre has proposed a roadmap to lower its debt-to-GDP ratio to 49–51% by FY31. The Budget for FY27 has projected the debt-to-GDP ratio for next financial year at 55.6%.  

 

The Centre also regularly holds discussions with states to help them manage their debt level, Sitharaman said. But the Centre alone cannot control the debt level of states, she said, adding that states must also take meaningful measures to manage their debt.  End

 

Reported by Krity Ambey

Edited by Vandana Hingorani

 

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