NEW DELHI: Keeping the ailing health of banks in mind, the Finance Minister Arun Jaitley while presenting his first full-year budget on Saturday, proposed an Autonomous Banks Board Bureau with the intent to improve bank governance and help lenders raise capital to meet their expansion needs.
The Bureau will search and select heads of public sector banks and help them in developing differentiated strategies of capital raising plans to innovative financial methods and instruments. Public sector banks require `2.40 lakh crore by 2018 to meet global Basel III norms. The FM also announced creation of a refinance agency, Mudra Bank, with an initial corpus of `20,000 crore to provide credit facilities to SC/ST businesses. There were 5.77 crore small business units that were mostly individual proprietorships, running small manufacturing and training business, he said, adding that 62 per cent of these were owned by SC, ST and OBCs.
Jaitley said education cess and secondary higher education cess would be subsumed in the central excise duty. On subsidies, he said the JAM Trinity programme would plug leakages and hoped that well-off MPs and ministers would give up subsidised LPG voluntarily. “While being mindful of the challenges... this gives us reason to feel optimistic. With all the humility at my command, I submit that this opportunity has arisen because we have created it. The people of India had voted resoundingly for quick change, faster growth and highest levels of transparency. They wanted the scam, scandal and corruption Raj to end,” Jaitley said. To check the flow of black money into the system, the Finance Minister said the use of credit cards and debit cards would be incentivised. Jaitley also announced 10-year imprisonment for hiding foreign assets, along with a host of tough measures, including dis-incentivising of cash dealings in real estate and other transactions.
Besides framing new legislation, the government would put a cap on cash transactions, while quoting PAN would be mandatory for all sale and purchase of over `1 lakh, Jaitley said in his Budget speech.
In other areas, while the FY15 deficit target of 4.1 per cent of GDP or `5.12 lakh crore, can be met, the government delayed the plan to reduce it to 3 per cent by one year to April 2017, from the earlier projection of April 2016. Total expenditure is estimated at `17.77 lakh crore, including defence and internal security, while gross tax receipts are likely to hover around `14.5 lakh crore. Plan expenditure has been cut by `1.07 lakh crore of the budgeted `5.75 lakh crore and non-plan expenditure is at `13.12 lakh crore. Agriculture credit target has been raised by `50,000 crore to `8.5 crore for FY16.