Union Minister for Finance Arun Jaitley interacts with the media on the volatility of the share market in New Delhi on Friday.
Advertisement
The Centre will also support public sector banks on their capital requirement, he said, adding that banks have played a very important role in supporting the economy and their support is crucial to boost growth. He assures there is no need for panic over global developments keeping in mind the inherent strength of Indian economy. But in his video post, Jaitley promised more measures to empower banks to recover bad loans and assured them of capital support while backing the clean-up of balance sheets ordered by the RBI. “The RBI is also giving guidance”, the finance minister said.
He also pointed out that India need not worry too much about the global economic turmoil as the country has stood out even in the midst of global slowdown.
The government is committed to protect the banks and give them the capital requirements.
On further push for GDP growth, he said the government is formulating policies and “is conscious of the areas of support which are required to be given to the economy and fully committed to providing those support”. “The government is also looking at other steps to empower banks to recover the funds”, he said, stressing that there should not be any over reaction or panic. Gross non-performing assets, or bad loans, are expected to jump 31.48 per cent in the fiscal ending March 2016 to Rs 4,26,400 crore from Rs 3,24,300 crore.
As on September 30, 2015, the gross NPAs of PSBs have increased to about R3 lakh crore as against R2.67 lakh crore in end-March. Moreover, the Bankruptcy law is under active consideration, he said referring to the Insolvency and Bankruptcy Code introduced in Parliament that aims to shorten the period of winding up of ailing companies to repay the dues of creditors. “There is obviously a problem of NPAs”. “I think it’s a problem, which will soon come under control”, he said. Last year, the government announced a revamped plan under which it would infuse Rs 70,000 crore in PSU lenders over four years. “Our projections are that any breach of minimum core capital requirements by a small minority of public sector banks, in the absence of any recapitalisation, will be small”, he had said.
“We do not envisage a sequence of AQRs”, Rajan had said. “And Indian markets are also being significantly impacted by this”.
In his meeting with the Consultative Committee attached to the Finance Ministry, Jaitley had said that Budget for the next fiscal needs to provide Rs 1.10 lakh crore for implementing the OROP and 7th Pay Commission award, besides a higher allocation for the farm sector.
Advertisement
Of the Rs 25,000 crore earmarked for 2015-16, the government has pumped in about Rs 20,088 crore in 13 public sector banks so far.
