Finance Minister Arun Jaitley addressed a post-Budget press conference, along with Minister of State for Finance Jayant Sinha, all secretaries in the finance ministry and Chief Economic Advisor Arvind Subramanian. Later, he also had a separate interaction with reporters. Excerpts from both events:
On consolidation of state-owned banks
Jaitley: The first and immediate agenda is to strengthen the banks. We will strengthen them by recapitalising the banks. Thereafter, we are willing to look at consolidation among subsidiaries, consolidation of subsidiaries with the principal bank, consolidation of a weak bank with a strong bank subject to an overall 52 per cent discipline that we have laid down for ourselves.
On further capitalisation of banks
On tax rebates
Revenue Secretary Hasmukh Adhia: Tax rebate has been increased from Rs 2,000 to Rs 5,000 for a person having income of Rs 5 lakh per annum. The second benefit is the deduction for rental, which comes to Rs 3,600 extra. In all, they get a relief of Rs 6,600.
On disinvestment
Jaitley: You have the minority stake sales and you have the option of selling hotels and other facilities like in ITDC. What I have done is given a third option. Say you have a company with 20 units. If it is decided that two of those units can be sold, then they will be sold to a private player, and the public sector unit can perhaps build two more units with the money that they get. It is about prioritisation - whether you want to hold that additional 20 per cent stake or use that money to build a road.
DIPAM (erstwhile disinvestment) Secretary Neeraj Kumar Gupta: The announcements show the new approach of the government. There has been a policy conversion. Change in the name of the department clearly underlines the new approach of the government.
We are committed to efficient management and leveraging of investment in the central public sector enterprises for expansion of economic activities as well as attracting fresh investments. We are confident that the targets for the year will be met.
On the fiscal deficit target
Finance Secretary Ratan Watal: There were credibility and optimisation arguments for adhering to fiscal deficit target and that is embedded in our exercise. We have made domestic savings available to private sector.
On medium-term fiscal framework
Watal: The medium-term fiscal framework will be looked into. We will have to look into it from the point of view of debt and impact on growth. Reviewing FRBM (Fiscal Responsibility and Budget Management) does not mean we will do away with fiscal balancing.
On capital spending and subsidies:
Watal: We are committed to maintaining our capital spending levels at 12 per cent of the GDP and major subsidies at 1.6 per cent of the GDP.
On borrowing targets for the year
Economic Affairs Secretary Shaktikanta Das: Maintaining the fiscal deficit target has ensured that the government's borrowing requirement has been kept to a minimum. The borrowing requirement for the year is Rs 4.2 lakh crore.
On the thrust of the Budget
Jaitley: The Budget deals with the reality of India. The challenge is to address the rural slowdown and build agriculture infrastructure.
On consolidation of state-owned banks
Jaitley: The first and immediate agenda is to strengthen the banks. We will strengthen them by recapitalising the banks. Thereafter, we are willing to look at consolidation among subsidiaries, consolidation of subsidiaries with the principal bank, consolidation of a weak bank with a strong bank subject to an overall 52 per cent discipline that we have laid down for ourselves.
On further capitalisation of banks
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Jaitley: What I have announced today (Monday) is not the last word or last amount as far as recapitalisation is concerned. Therefore, something more will happen.
On tax rebates
Revenue Secretary Hasmukh Adhia: Tax rebate has been increased from Rs 2,000 to Rs 5,000 for a person having income of Rs 5 lakh per annum. The second benefit is the deduction for rental, which comes to Rs 3,600 extra. In all, they get a relief of Rs 6,600.
On disinvestment
Jaitley: You have the minority stake sales and you have the option of selling hotels and other facilities like in ITDC. What I have done is given a third option. Say you have a company with 20 units. If it is decided that two of those units can be sold, then they will be sold to a private player, and the public sector unit can perhaps build two more units with the money that they get. It is about prioritisation - whether you want to hold that additional 20 per cent stake or use that money to build a road.
DIPAM (erstwhile disinvestment) Secretary Neeraj Kumar Gupta: The announcements show the new approach of the government. There has been a policy conversion. Change in the name of the department clearly underlines the new approach of the government.
We are committed to efficient management and leveraging of investment in the central public sector enterprises for expansion of economic activities as well as attracting fresh investments. We are confident that the targets for the year will be met.
On the fiscal deficit target
Finance Secretary Ratan Watal: There were credibility and optimisation arguments for adhering to fiscal deficit target and that is embedded in our exercise. We have made domestic savings available to private sector.
On medium-term fiscal framework
Watal: The medium-term fiscal framework will be looked into. We will have to look into it from the point of view of debt and impact on growth. Reviewing FRBM (Fiscal Responsibility and Budget Management) does not mean we will do away with fiscal balancing.
On capital spending and subsidies:
Watal: We are committed to maintaining our capital spending levels at 12 per cent of the GDP and major subsidies at 1.6 per cent of the GDP.
On borrowing targets for the year
Economic Affairs Secretary Shaktikanta Das: Maintaining the fiscal deficit target has ensured that the government's borrowing requirement has been kept to a minimum. The borrowing requirement for the year is Rs 4.2 lakh crore.
On the thrust of the Budget
Jaitley: The Budget deals with the reality of India. The challenge is to address the rural slowdown and build agriculture infrastructure.