Slow down of economic growth a challenge to the economic environment: FM

The Finance Minister Jaitley was making the opening remarks during his Pre-Budget Consultations with the representatives of Banks and Financial Institutions here

June 11, 2014 9:07 IST | India Infoline News Service
The Union Finance Minister Arun Jaitley said that slow down of economic growth coupled with high inflationary pressure poses a challenge to the economic environment. The Finance Minister asked the representatives of the Banks and Financial Institutions (FIs) that we together need to steer the economy in the right direction. The Finance Minister Jaitley was making the opening remarks during his Pre-Budget Consultations with the representatives of Banks and Financial Institutions here.

Along with the Finance Minister, the meeting was attended by Nirmala Sitharaman, Minister of State for Finance and Corporate Affairs, Dr. Arvind Mayaram, Finance Secretary, Ratan P. Watal, Expenditure Secretary, Rajiv Takru, Revenue Secretary, G.S. Sandhu, Secretary, Financial Services, Dr. Urjit Patel, Deputy Governor, Reserve Bank of India and other senior officers of the Ministry of Finance among others.

Various suggestions were received from the different representatives of the Banks and Financial Institutions. Major suggestions include reduction in time limit and number of adjournments in case of SARFAESI matters for early resolution, statement in budget regarding recapitalization of public sector banks, dilution of government ownership in public sector banks up to 51%, implementation f recommendations of Naik Committee Report, removal of mismatch between asset liability and banks balance sheets and need for revision of definition of priority sector lending among others.

Besides it, other suggestions include continuation of interest subvention scheme for the investment lending in agriculture sector, joint collaborative group about 6 lakh in number promoted by NABARD be included in priority Sector lending, about 72 lakh Self Help Groups(SHGs) of women promoted by NABARD be exempted from service tax for the services rendered by them to small farmers etc, tax benefit limit for health insurance be suitably raised, tax exemption under Section 80C of the Income Tax Act be raised, Insurance Awareness be made part of corporate social responsibility(CSR), availability of cheaper credit to 100 Mid Cap exporters , interest subsidy for solar power projects, setting- up of National Asset Management Company for dealing with NPAs of the banks, more bolder approach in case of Rajiv Gandhi Equity Scheme (RGESS) to enlarge its scope, relook at various provisions of New Companies Bill, inclusion of venture capital in case of small business/entrepreneurs as priority sector lending and making LIC a Public Limited Company among others..

Other suggestions included abolition of Section 80(P)(4) of the Income Tax Act, 1961 i.e. free urban cooperative banks from payment of income tax, need for an Umbrella Organisation in the form of National Level Urban Cooperative Bank (UCB) for all 1600 Primary Cooperative Banks of India and Rs. 5000 crore as Seed Share Capital to this National Level Apex bank of UCB Sector, removal of prohibition on admittance of Cooperative Society as a member of Urban Cooperative Bank existing in Banking Regulation Act, 1948, amendment to Chapter-V of Finance Act 1994 as amended by Finance Act, 2013 dated 10.5.2013 towards adding subscriptions of UCBs Association in Negative List, and amending DICGC Act, 1961 (i) to raise the existing limit from Rs. one lakh to Rs. three lakh in general and (ii) further to allow choice to UCBs to insure voluntarily deposits and loans up to Rs. 5 lakh per individual by paying risk weighted premia.

Representatives from different Banking and Financial Institutions who participated in todays meeting included Smt. Arundhati Bhattacharya, State Bank of India, Dr. Rajiv B. Lall, IDFC Ltd., M. Narendra, Indian Overseas Bank (IOB), K.R. Kamath, Punjab National Bank (PNB), S.S. Mundra, Bank of Baroda (BOB), Sudhir Kumar Jain, Syndicate Bank, Rajiv Rishi, Central Bank of India, M.S. Raghavan, IDBI, Dr. Harsh Kumar Bhanwala, NABARD, S.K. Roy, LIC, G. Srinivasan, New India Insurance, Yaduvendra Mathur, EXIM Bank, S.B. Nayar, India Infrastructure Finance Company Ltd. (IIFCL), Arnab Roy, National Housing Bank, Naina Lal Kidwai, HSBC, Sunil Kaushal, Standard Chartered Bank, Uday Kotak, Kotak Mahindra Bank Ltd, Malay Mukharjee, IFCI, Shikha Sharma, Axis Bank Ltd, Mukund L. Abhyankar, National Federation of Urban Cooperative Banks and Credit Societies Ltd., (NAFCUB) and Raman Aggarwal, Finance Industry Development Council (FIDC) among others.

The Finance Minister Jaitley assured that the issues raised and suggestions made by different representatives of Banks and Financial Institutions will be looked into in detail and will be duly considered.

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