Today, Finance Minister Nirmala Sitharaman along with Anurag Thakur reached Lok Sabha to present the maiden budget of the second Narendra Modi government on July 5, 2019. One of the major setback steps taken by Modi Government 2.0 is that they have decided to invest a handsome amount of money i.e. 70,000 crores for the recapitalization of Private sector banks.
Shares of public sector banks gained up to 5 percent today after FM Nirmala Sitharaman announced fund infusion of Rs 70,000 crore into PSBs to strengthen them and enhance lending capacity.
In her analysis of the PSU Bank recapitalization package and NBFC measures, Former SBI chief Arundhati Bhattacharya tells CNBC-TV18’s Udayan Mukherjee that about Rs 30,000 crore of the Rs 70,000 recapitalization will be used as growth capital by banks.
On NBFCs, she believes one good measure announced was providing RBI with more power. RBI can do a quick stress test of NBFCS and reassure markets on their actual strength and weakness and measures to ease them over a period of time. RBI can help assuage the uncertainty on that front, she believes.
Budget moves to be appreciated:
The fiscal deficit target is 3.3% of GDP, brought down from 3.4%.
TDS of 2% on cash withdrawals exceeding ₹1 crore in a year from bank accounts, to discourage business payments in cash.
Additional deduction on loans up to March 31, 2020, for buying affordable houses giving ₹7 lakh benefit to home buyers.
Lower rate of 25% so far only applicable to companies with a turnover of ₹250 crores. Propose to increase this limit to companies with an annual turnover of ₹400 crores. This will cover 99.3% of companies.
GST rate on electric vehicles already proposed to be lowered to 5%. Additional income tax deduction of ₹1.5 lakh on interest on loans taken to purchase electric vehicles.
PAN and Aadhaar to be interchangeable, and to allow those without PAN to file income tax by using Aadhaar number. Faceless and anonymous assessment system for income tax being rolled out this year in phases.
Air India disinvestment to be reinitiated. Govt sets an enhanced target of ₹1.05 lakh crore from disinvestment.
Moves don’t need to be overlooked:
Deduction of 433 crores from the Irrigation department.
Deduction of 2124 crore from the Women’s Micro Finance Fund.
Again less expenditure on health-related issues. As per the statistics, we need to invest at least 3% of our GDP to sustain the better health conditions for all Indians.