Cabinet defends big reforms, approves Rs 2.11 lakh crores for public sector banks

New Delhi: Finance Minister Arun Jaitley on Tuesday said the Indian economy is on a strong wicket with sound macro-economic fundamentals.

At a press briefing to detail state of the economy, he said India has been the fastest growing major economy for the last three years and the attempt is to maintain high growth rate in coming years.

In a presentation made at the briefing, Economic Affairs Secretary S C Garg said inflation has consistently come down since 2014 and will not cross 4 per cent this fiscal.

Detailing macro-economic fundamentals, he said that current account deficit will be less than 2 per cent this year and foreign exchange reserves have crossed USD 400 billion.

On fiscal deficit, he said the government is committed to sticking to the target of 3.2 per cent of GDP for the current fiscal but a review would be done in December.

Stating that the GDP growth slowdown has bottomed out and the economy is turning around, he said the International Monetary Fund (IMF) had recently projected that the country would achieve a 8 per cent growth rate soon.

Garg further said that the government is confident of surpassing the disinvestment target of Rs 72,500 crore for this fiscal.

In addition, an approval for a massive recapitalisation plan for state-run banks worth Rs 2.11 lakh crore was made.

Of this amount, a sum of Rs 1.55 lakh crore will be raised through recapitalisation bonds, Financial Services Secretary Rajiv Kumar told reporters here following a meeting of the Cabinet.

Another Rs 76,000 crore would be available from budgetary support and raised through market borrowings, he added.

Finance Secretary Ashok Lavasa said that total government expenditure so far this fiscal has been Rs 11.47 lakh crore out of Rs 21.46 lakh crore budgeted for this financial year.

Out of capital expenditure target of Rs 3.09 lakh crore, Rs 1.46 lakh crore has already been spent. Central public sector units have spent an additional Rs 1.37 lakh crore out of their target of Rs 3.85 lakh crore.

Lavasa said 83,677 km of road will be built in the next five years.

Banking sector non-performing assets (NPAs) rose from Rs 2.75 lakh crore in March 2015 to Rs 7.33 lakh crore as on June 2017, Department of Financial Services Secretary Rajiv Kumar said. Of that Rs 1.75 lakh crore relates to just 12 cases which have been referred to NCLT.