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.
The author is Shyam Srinivasan, MD & CEO, Federal Bank