Govt seeks Parliament nod for Rs 25,500 cr additional spending
The Finance Ministry on Friday sought Parliament's nod to spend an additional Rs 25,500 crore in the current fiscal, nearly half of which will be spent on capital infusion into state-owned banks to help them overcome the high bad loans situation.
New Delhi: The Finance Ministry on Friday sought Parliament's nod to spend an additional Rs 25,500 crore in the current fiscal, nearly half of which will be spent on capital infusion into state-owned banks to help them overcome the high bad loans situation.
Finance Minister Arun Jaitley, in the first supplementary demands for grant presented in Parliament, sought approval for gross spending of Rs 40,821.88 crore. Net cash expenditure would however be lower at Rs 25,495.24 crore after accounting for savings or enhanced receipts/recoveries of Rs 15,325.62 crore. This spending would be on top of Rs 17.77 lakh crore expenditure provided in the annual Union Budget for 2015-16.
The ministry plans to infuse Rs 12,110 crore as capital in state-owned banks struggling with highest levels of bad debts in 13 years. This is on top of Rs 7,940 crore provided by Jaitley in the Budget for 2015-16.
"Bank recapitalisation plan is comprehensive. We have put in four years plan to push growth and tackle NPA," he said.
The allocations compare to Rs 6,990 crore of 2014-15, the lowest total since at least 2009.
"Rs 20,000 crore (capital infusion) would happen as early as possible. It can happen by September after we get approval from Parliament," Financial Services Secretary Hasmukh Adhia told reporters here.
The Finance Ministry in a statement said public sector banks (PSBs) as of now are "adequately capitalized" but would need Rs 1,80,000 crore extra capital over the next four years (up to FY 2019). Of this, the government plans to provide Rs 70,000 crore through budgetary support - Rs 25,000 crore each in current and next fiscal and Rs 10,000 crore each in 2017-18 and 2018-19.
Banks would be required to raise the remaining amount from the market, the statement said.
Besides, the Government has sought Parliament nod for injecting Rs 800 crore as equity in state-owned Air India and an additional Rs 4,000 crore towards Integrated Child Development Scheme and other programmes of the Ministry of Women and child development.