AMN
The Union Cabinet has approved a capitalisation plan of two lakh eleven thousand crore rupees for public sector banks.Addressing a press conference in New Delhi this evening, Finance Minister Arun Jaitley said, the huge spending on infrastructure announced today will give a fillip to private sector investment, direct benefit to MSMEs and employment generation.
He said, once the banks are strengthened, appetite for their stock will improve. He said, it was decided that a bold step needs to be taken by the government to recapitalise banks.
Mr Jaitley said, various capital infusion measures have been taken by the government to ensure health of public sector banks. He said, public sector banks will catalyse private investments and there is a need to increase public investment.
The Finance Minister said, the fundamentals of the economy continue to be strong. He said, India has remained the world’s fastest growing economy for the last three years.
Mr Jaitley said, structural reforms have short-term impact but will help in the medium and long-term. He said, the government has decided on the steps necessary to sustain the growth momentum.
Secretary Department of Economic Affairs S C Garg said, the real GDP growth average in the last 3 years has been 7.5 per cent.
Mr Garg expressed confidence that the disinvestment target for this year will exceed. He said the Current Account Deficit is at a low level. Similarly, there has been a consistent low inflation story.
Finance secretary Ashok Lavasa said the government has put special thrust on development sector. He said more than 83 thousand kilometres roads will be built over the next five years with an investment of 6.92 lakh crore rupees.
He said under Bharatmala project, 34 thousand 800 km roads will be constructed at a cost of over 5 lakh 35 thousand crore rupees.
Congress said the announcement to recapitalize public sector banks with 2 lakh 11 thousand crore rupees is too little and too late for the hardships economy has faced.
Reacting to government’s decision on the issue, party spokesperson Randeep Surjewala said, NPAs of 39 banks are at an all time high with government failing completely to renegotiate the loans, recover public money and address core fundamentals of fiscal discipline. Mr Surjewala said, Finance Minister Arun Jaitley has no clue of when and how it will issue these bonds and by when the money reach the banks.
He said, the fall of GDP in the last quarter of 2016-17 indicates that the country is moving towards a low trajectory and has slipped to a three year low.