The appointment of Revenue Secretary Sanjay Malhotra as the new Governor of the Reserve Bank of India has left a huge vacancy in Finance Minister Nirmala Sitharaman’s Budget team. With less than two months to go for the Union Budget 2025-26 to be presented, an announcement on the new Revenue Secretary is expected soon.
Malhotra, a 1990-batch officer of the Indian Administrative cadre, who is set to take charge as RBI Governor from December 11, has been in the finance ministry since 2022. He first served an eight-month stint as Secretary, Department of Financial Services, and then was appointed Secretary, Department of Revenue, on December 1, 2022.
The Revenue Secretary deals with tax policies and proposals as well as tax collection targets and is a core member of the Budget-making team. As announced in the Union Budget 2024-25, this year, the revenue department has also been working on reviewing the Income Tax Act, 1961, as well as a comprehensive review of the customs duty rate structure.
The finance ministry is currently in the midst of pre-Budget meetings with various stakeholder groups to get their suggestions for the Budget that will be presented in early February.
As Revenue Secretary, Malhotra is also the ex-officio Secretary of the Goods and Services Tax Council. The Council is set to meet on December 21 in Jaisalmer, where it is expected to discuss key issues including rate rationalisation, exemption of insurance premium from GST as well as alternatives to the compensation cess.
Malhotra is known for his reasoned decisions and calm disposition and is seen as a problem solver who has helped in consensus building and swift implementation of policy decisions.
In his last public event as Revenue Secretary at the 67th Foundation Day of the Directorate of Revenue Intelligence, Malhotra acknowledged the vital role of DRI in revenue generation, but emphasised the need for it to maintain a balance between the enforcement actions and unhindered legitimate trade for broader economic interests of the country.
For now, analysts are keeping their fingers crossed about Malhotra’s transition to the Mint Street but expect it will be seamless and are still hopeful of a rate cut in February 2025.