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