Finance minister Nirmala Sitharaman presented her maiden budget on 5th July 2019 and since then, a lot had been debated over how far it had met the expectations of various industries. The banking and finance sector seems to have most of their wishes fulfilled compared to other sectors.
Recapitalisation and credit guarantees
The government has announced a capital infusion of around Rs 70,000 crore to the public sector banks and one time six months partial credit guarantee to state banks that buy highly rated pooled assets from NBFCs.
The recapitalisation of the banks is one of the best steps the government has taken since this will improve the credit flow to the economy which in turn will help the country gear up for higher growth.
Disinvestment of CPFC
For improved capital inflow, the government is realigning its holdings in the Central Public Sector Enterprises (CPSE) and reducing its stake in Public Sector Undertakings (PSU) to below 51 percent.
In her budget speech Sitharaman estimated the government’s disinvestment proceeds to be over Rs 1.05 lakh crore, an increase of around 31 percent from last year’s figure. The government has identified almost 30 PSUs for disinvestment this year including Air India.
Boost to MSMEs
The government has introduced a scheme of providing loans of up to Rs 1 crore within 59 minutes through a dedicated online portal. Additionally, over Rs 350 crore has been allocated for FY 2019-20 for 2 percent interest subvention for all GST registered MSMEs on fresh and incremental loans.
The finance minister also announced the government’s plans to create a platform for all the MSMEs to enable filing of bills and payments to avoid delays in government payments.
”The budget provides a blueprint for the Prime Minister’s vision of a $5 trillion economy, with a focus on ease of doing business for MSMEs and ease of living for citizens” said Anupama Pahuja, MD, Paypal India.
On top of this, the government, under a new ‘PM Karam Yogi Maan Dhan Scheme’, is extending pension benefit to over 3 crore retail traders and small shopkeepers who have revenue of less than Rs 1.5 crore. There are also many new schemes and programmes proposed by the government to enhance growth in rural sector and achieve the desired goal in ‘New India’.