Union Budget FY23: From section 80C, NARCL operationalisation to LIC listing, key expectations for the banking and financial sector

1 Feb 2022 , 07:52 AM

The banking and financial sector has made significant achievements in the ongoing pandemic especially in terms of digital boost. Currently, in the sector, divestment of stake in two public sector banks and operationalisation of the Development Financial Institutions has taken rounds of discussion and can be expected to be in focus during this Union Budget 2022-23. 

Here’s what you can expect in Union Budget FY23 by CARE Ratings:

Banking:

• Operationalise the NARCL
• Disinvest government stake in two public sector banks
• Agriculture credit availability target could be increased to Rs 18 lakh crore (an increase of 10%; same as the previous year)
• Extension of the ECLGS scheme

Financial Services:

• Operationalisation of the Development Financial Institutions (DFI)
• Creation of an NBFC lending facility like NHB’s refinance for HFCs

Insurance:

• Definite timelines to the listing of LIC
• Increase in Section 80C allowance from Rs 1.50 lakh to Rs. 2.50 lakh per assessee
• Reduction of GST rate for insurance