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The government will infuse capital in public sector banks in the next three to six months, Finance Minister Arun Jaitley said at Citi event in New York.
Jaitley has earmarked Rs 7,940 crore in the Budget for recapitalisation of public sector banks (PSBs) during the current financial year.
Citi had hosted Jaitley at an investor event where he spoke on the government’s direction, approach to policy making, what has been done/ lies ahead, and political, legislative, and economic challenges facing the country.
The minister is in the United States on an official visit.
After reviewing performance of the government-owned banks on June 12 in New Delhi, Jaitley had promised more capital infusion into the banks, saying there’s “merit” in their demand for more funds, over and above what was provided in the Budget.
In 2014-15, the government had injected Rs 6,990 crore in nine public sector banks based on their performance.
Reserve Bank of India (RBI) Deputy Governor S S Mundra had recently said the amount earmarked for recapitalisation of PSBs in the current financial year was not adequate. RBI had asked the finance ministry to raise the quantum of assistance in view of mounting bad loans and to support growth.
Jaitley at the Citi event told investors his government’s mantra has been to open up closed sectors, promote ease of doing business and continue tax reforms.
Referring to the government’s road map, he said the thrust would be on manufacturing and agriculture sectors, raising investment in infrastructure and rural economy and rationalising subsidies.
On the proposed Goods and Services Tax (GST), he appeared confident about meeting April 2016 deadline for implementing the new indirect tax regime.
The Rajya Sabha select Committee which is scrutinising the Constitution amendment Bill for roll out of the GST is expected to submit its report to the Upper House next month. The Lok Sabha had already approved the Bill.
