Af­ter Re­cap­i­tal­i­sa­tion of PSBs, Govt to Push for Merg­ers: FM

The Economic Times - - Economy - Our Bureau

New Delhi: The gov­ern­ment will push for con­sol­i­da­tion of pub­lic sec­tor banks once they are cap­i­talised and strength­ened, Finance Min­is­ter Arun Jait­ley said on Tues­day and promised more mea­sures to en­hance the ease of do­ing busi­ness in In­dia.

He also said that he hoped for some “pos­i­tive” devel­op­ment in the gov­ern­ment’s dis­in­vest­ment pro­gramme and a bet­ter mon­soon to drive the econ­omy for­ward. “We have now un­der­taken this ex­er­cise of re­cap­i­tal­i­sa­tion of banks within the ex­ist­ing re­sources. I am try­ing to find ad­di­tional re­sources for that pur­pose...strengthen the banks,” he said at an event or­gan­ised by the In­ter­na­tional Finance Cor­po­ra­tion, a mem­ber of the World Bank Group. “Once they are strength­ened, I am go­ing for con­sol­i­da­tion of some banks,” he said. In his Bud­get speech on Fe­bru­ary 29, Jait­ley had talked about ini­ti­at­ing con­sol­i­da­tion among staterun banks. “The Bank Board Bureau will be op­er­a­tionalised dur­ing 2016-17 and a roadmap for con­sol­i­da­tion of pub­lic sec­tor banks will be spelt out,” he had said.

In­dia has 27 state-run banks, with sig­nif­i­cant over­lap in op­er­a­tions.

The gov­ern­ment has al­lo­cated .₹ 25,000 crore to re­cap­i­tal­i­sa­tion of pub­lic sec­tor banks in this fis­cal Jait­ley had talked about con­sol­i­da­tion of PSBs in Bud­get speech Govt has al­lo­cated 25,000 cr to­wards re­cap­i­tal­i­sa­tion of PSBs in this fis­cal FM hopes to see pos­i­tive devel­op­ment in di­vest­ment of state-run cos this fis­cal Says though low oil prices have helped In­dia, global situation is chal­leng­ing; calls for need to cre­ate fire­walls and the FM has promised more cap­i­tal, if needed, for the state-run lenders hit by bad loans.

In 2016-17, Jait­ley has bud­geted .₹ 56,500 crore of rev­enues from dis­in­vest­ment, in­clud­ing .₹ 20,500 crore from strate­gic sales.

On Tues­day, he said that though the low oil prices have helped In­dia, the global situation is chal­leng­ing, par­tic­u­larly shrink­age of ex­ports. There is volatil­ity and un­pre­dictabil­ity and “frankly no­body knows how long this will last”, he said, call­ing for cre­ation of fire­walls to cush­ion the im­pact of global de­vel­op­ments.

FM has promised more cap­i­tal if needed OTHER IS­SUES

Hopes that this year mon­soon will be good & agri growth will pick up

In com­par­i­son to the rest of the world, In­dia looks good, but “com­pared to our own stan­dards and our own po­ten­tial, I think we can do much bet­ter”, he said.

Jait­ley ex­pressed hope that this year the mon­soon will be good and the agri­cul­ture sec­tor growth will pick up. Two suc­ces­sive years of bad mon­soons have stressed the ru­ral econ­omy, dent­ing the over­all cus­tomer de­mand.

The finance min­is­ter said the gov­ern­ment is com­mit­ted to re­forms and things ap­pear to be in the fi­nal round as far as Goods and Ser­vices Tax is con­cerned.

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