Stake sale in PSBs a welcome move

Finance Minister Nirmala Sitharaman
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Finance Minister Nirmala Sitharaman

Highlights

Stake sale by government in public sector companies and financial institutions, including 2 PSBs and one insurance company, in the next fiscal year is a welcome move

Stake sale by government in public sector companies and financial institutions, including 2 PSBs and one insurance company, in the next fiscal year is a welcome move.

Another important highlight of the Budget is the announcement of FDI in insurance from 49 per cent to 74 per cent which will attract more foreign players and lead to increased investments in the sector. In the long run this will help increase the penetration of insurance in the country.

In terms of specific proposals for the banking sector, the FM announced an infusion of Rs 20,000 crore into PSU Banks, this will provide a very boost credit growth.

Also proposed is takeover of bank's stressed assets by Asset Reconstruction Companies which will help the banks to free their books of bad loans and thereby more funds for lending. Besides it will help fetch better value for the asset by aggregating debt.

Depositors of failed banks will now have access to funds' faster as the FM has announced that if a failed bank has been put under watch by the RBI, the bank's customers won't have to wait for the institution to be liquidated to get funds insured by the Deposit Insurance and Credit Guarantee Corporation.

The Budget has extended the tax holiday for start-ups by one more year providing boost to the start-up eco-system. Affordable Housing also gets necessary boost through tax incentives. Proposed reforms in taxation are also welcome.

Overall, this is a good budget that aims to further the 'Aatmanirbharta' mission, by focusing on doubling farmers' income, strong infrastructure, women's empowerment, healthy India, good governance, education for all; jobs for the young. inclusive development; and ease of compliance for citizens and businesses.

— The author is MD & CEO, Indian Bank

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