Arun Jaitley takes on Opposition
"If the Opposition wants to observe black day on 8 November it is up to them. This shows their respect towards the cash economy," says Finance Minister Arun Jaitley on the Congress announced that they would observe 8 November — a year of demonetisation — as a black day.
Banking stocks to improve
"Share sale of state-owned banks to be attractive after recapitalisation. Once you strengthen banks, the appetite for their stock will improve," says Finance Minister Arun Jaitley.
Recapitalisation bonds in larger interest of the nation: Jaitley
Finance Minister Arun Jaitley says that whether or not the recapitalisation bonds will impact fiscal deficit is a function of what the nature of the bond will be and which agency issues the bonds. But even if it is a part of the fiscal deficit, it will be in the larger interest of the nation.
How will recapitalisation bonds work?
One big question at this moment is how exactly the recapitalisation bonds will work and what will be its impact on the government debt situation? During the presser Arun Jaitley said the government will have to work out the nature of the recap bonds. Jaitley cited international experience where similar bonds are not part of the fiscal deficit but mentioned that in India the situation could be different. The critical clarification needed now is to see which will is the agency that will issue these bonds. If the government issues these bonds, then it becomes part of the government debt. There is no clarity on this as of now. Besides, there is no clarity on for how many years these bonds will be issued. The details of the recapitalization bonds will be keenly watched. In a chat with CNBC-TV18, former RBI deputy governor, KC Chakrabarty, recap bonds are good instruments but if banks need to bear the cost of the exercise, this may not be a good way to recapitalise the banking sector.
Boosting public investment consistent attempt of govt: Jaitley
"Boosting public investment is a consistent path we have followed. There are no embargoes as per as wilful defaulters are concerned," says Finance Minister Arun Jaitley.
GST a legitimate tax: Jaitley
"People who were worried about 2G and coal blocks would be affected by the legitimate tax," " says Finance Minister Arun Jaitley on Congress vice-president Rahul Gandhi's jibe on GST.
Between 2014-15 and 2017-18, banks have made provisions of over Rs 3 lakh crore, more than 10 times the amount made in the preceding 10 years.
Indiscriminate lending by banks
"Between 2008 and 2013 public sector banks engaged in indiscriminate lending," says Finance Minister Arun Jaitley.
Bold step by the govt: Jaitley
"It was decided that a bold step needs to be taken by the government to recapitalise banks," says Finance Minister Arun Jaitley.
Need to increase public investment: Arun Jaitley
"There is a need to increase public investment.Measures today will boost infra spending in a big way. Public sector banks have adequate lending capacity now, post demonetisation," says Finance Minister Arun Jaitley.
PSB Recapitalisation— CNBC-TV18 (@CNBCTV18Live) October 24, 2017
Banking Secy: Rs 1.35 lk cr will come via recapitalisation bonds & Rs 76,000 cr via budgetary support, mkt raising
Big bonanza for banking sector
Government officials listed out plans to increase spending on infrastructure projects such as the construction of 34,800 km of roads under the BharatMala programme with an investment of Rs 5,35,000 crore. This is indeed an encouraging move and, probably, the only option with the government right now to push growth when private investments are really not taking off. Top finance ministry officials stressed on strengthening the banking sector by recapitalizing public sector banks and enabling them to lend to key productive sectors in the economy. But, the big announcement came when officials talked about the cabinet approval of Rs2.11 lakh crore recapitalization package for state-run banks, of which Rs1.35 lakh crore will come from recap bonds and Rs76000 crore from budgetary support and market-raising. If this plan becomes a reality as envisaged, this will be a big booster dose not just to the banking sector but to the larger economy as well. One needs to wait for the details though.
Govt takes big step to make public sector banks healthier
The government in an "unprecedented" cabinet nod has allowed Rs 2,11,000 crore to be used for PSB capitalisation. Of this, Rs 1.35 lakh crore will come from recap bonds, while the rest will come from the market and budgetary support.
Need for stronger banks
"Strong banks are the need of the hour," says finance ministry
"Post systematic Asset Quality Review, stressed assets have been recognised as non-performing assets," says Ministry of Finance.
PWDs step in
"Road building to be delegate to many entities like state PWDs," says finance secretary Ashok Lavasa.
New coastal roads to come up
"About 2,000 km of coastal roads to be constructed in Phase I," says finance secretary Ashok Lavasa.
Damage control mode
The Narendra Modi government has clearly begun its efforts to manage perceptions on the economy in view of criticism from within the ruling party and outside. As the presser began on Tuesday evening, Union Finance Minister, Arun Jaitley said the government has done a detailed analysis of the economic situation and is willing to respond in any manner required to address the problems in the economy. This is sort of an admission that government has finally acknowledged the problems in the economy. Finance ministry officials listed out key macroeconomic numbers that show healthy fundamentals—low inflation, fiscal deficit and high foreign exchange reserves. But, what about plans to tackle bigger problems—crisis in the banking sector, falling private investments, land and labour reforms and a seeming rise in unemployment?
Targeted spending by the government
"Effective and targeted government spending is the main priority of the government," says finance secretary Ashok Lavasa.
New roads to be constructed under BharatMala programme
"34,800 km of roads to be constructed under the BharatMala programme with an investment of Rs 5,35,000 crore to be invested," says finance secretary Ashok Lavasa.
GST biggest reform: Subhash Garg
"GST has been the biggest reform, along with other ones like demonetisation and the battle against black money," says economic affairs secretary Subhash Garg.
Big push to budget spending: Ashok Lavasa
"There has been a big push to budget spending as the budget was passed by 31 January this year," says finance secretary Ashok Lavasa.
Rising foreign reserves
"Foreign reserves have crossed $400 billion this year. $100 billion came in last year," says Economic Affairs Secretary Subhash Garg.
"India is a picture of consistent low inflation," says Economic Affairs Secretary Subhash Garg.
Jaitley allays fears on economy
"There are strong macroeconomic fundamentals," the minister said.
Discussions on economy held with prime minister: Jaitley
"We will report on the situation as they develop. A lot of internal meetings on the state of economy internally within the ministry were held. Discussions were also held with the prime minister. But India has remained one of the fastest growing economies in the world," says Finance Minister Arun Jaitley.
Arun Jaitley likely to speak on state of the economy: CNN-News18
CNN-News18 reported that the finance minister is likely to address the nation on the state of the economy. He had recently discussed non-performing assets management with Prime Minister Narendra Modi.
Union finance minister Arun Jaitley will hold a press conference at 4 pm on Tuesday at the National Media Centre in Delhi and is likely to make some major announcements.
— PIB India (@PIB_India) October 24, 2017
According to CNBC-TV18, the government will make a crucial announcement related to the recapitalisation of capital starved public sector banks. The minister is likely to decide the plan for increasing capital in the weak balance sheets of banks including United Bank of India, UCO bank, Corporation bank, Allahabad Bank, Indian Overseas Bank, and Dena Bank, among other capital starved banks as the industry suffers from a decade-low credit growth at around six percent.
According to sources cited by CNBC-TV18, recap bonds may be announced, which would be sold to banks that can then be converted into equity after a certain period.
Finance ministry secretaries are likely to be present at the announcement, which comes after a meeting which was attended by top officials on Tuesday, The Financial Express reported.
However, according to The Economic Times, the finance minister met Prime Minister Narendra Modi to apprise him of the state of the economy. The government may look at mid-term growth plans via higher public spending, the report said.
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Updated Date: Oct 24, 2017 18:18:48 IST
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