Post Budget Comments
of Mr. Shyam Srinivasan, MD & CEO, Federal Bank
This is a
progressive and forwarding looking budget that focuses on a range of areas that
has a direct influence on the health of the economy. The nine pillar approach
that sets the priority areas for the year is a welcome step as each of these
are vital to the growth of the overall economy.
· Fiscal Deficit target being maintained
is a great show of confidence.
· Housing being activated is a
fundamental plus as the Economy gets lubricated when housing picks up. Keeping
in view housing for all by 2022, this is a welcome move.
· With a bank branch network which is significantly
weighted towards Rural/ Semi-Urban, we welcome many of the Budgetary
allocations to Rural sector whose flagging purchasing power will get
re-energised.
· The proposal to enact the Bankruptcy
law, although on expected lines, is a major announcement that will help enhance
the credit health of Banks. Though one would have hoped for a higher allocation
for recapitalization of public sector banks, it is reassuring to note that the
Government is committed to supporting the Banks as was stated in no uncertain
terms in this budget.
· The proposed amendments to the
SARFAESI Act 2002 to enable the sponsor of an ARC to hold up to 100% stake in
the ARC and permit non institutional investors to invest in Securitization
Receipts may help in creating a secondary market for sticky assets.
· The significant increase in outlay for
infrastructure will aid growth apart from improving the quality of living
conditions. Similarly the opening up of the Road Transport in the passenger
sector is a bold step forward as it will create employment and promote
entrepreneurship. The move to bring a new credit rating system exclusive for
infrastructure lending will facilitate revival of stalled projects and thereby
create credit demand. Some of the moves that are directionally welcome are
digitalization of land records, Stand Up India Scheme for promoting
entrepreneurship, schemes to promote digital literacy, Corporate Tax benefit
for start-ups, the focused and time-bound measures to double income of farmers
by 2022 and incentivizing Oil and Gas production.
The Government’s
commitment to strengthen the social and healthcare sectors through a slew of
measures like providing cooking Gas to BPL household, setting up of National
Dialysis service programme under PPP mode, New health protection scheme for
providing health cover up to Rupees One lakh per family etc. will provide
succor to the needy and deserving.
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