Bankers welcomed Finance Minister Nirmala Sitharaman’s budget proposals as being growth accretive, and hailed the focus on capital expenditure while continuing with fiscal consolidation.
On the critical question of revival in private capital expenditure, which has been lagging for several years now, private sector lender Kotak Mahindra Bank’s whole time director KVS Manian opined that it will take another 12 months to revive even though corporates have been investing off and on lately.
“No bad news is good news. It is a fairly decent budget. The FM has maintained a fair balance on fiscal prudence, sustainability and ease of doing business,” Manian told PTI after the presentation of the budget.
SBI chairman Dinesh Khara said the budget is growth accretive, fiscally prudent and consumption supportive.
“The huge emphasis on capital expenditure could be the perfect recipe for a private investment cycle that is already visible. Support for MSME and Agriculture will broad base credit growth,” Khara added.
He also said that the “reasonable Government borrowing numbers” will support lower interest rates and the move towards a clutter free new tax regime will significantly spur consumption.
Banking industry’s lobby grouping Indian Banks Association’s chairman A K Goel said the increased capital expenditure could help in further increasing the demand for bank funds and the Agriculture Accelerator Fund will also be helpful.
Umesh Revankar, the executive vice chairman of Shriram Finance said the income tax benefits announced will boost purchasing power for middle-class consumers.
“I believe the announcements made will trigger a pick-up in credit off take for small enterprises, the consumption-driven two-wheeler business and lending to transportation,” he added.
Non-bank lender Tata Capital’s managing director and chief executive Rajiv Sabharwal said the strong agricultural credit outlay, support measures, ease of doing business, and digitization drive across various sectors will improve multiple clusters within the economy.
American lender Bank of America’s country head Kaku Nakhate said allowing foreign banks to conduct acquisition financing from GIFT City is a welcome step and also hailed the dual budget proposal for a single window clearance for IFSCA, SEZ, RBI, SEBI and GSTN at GIFT City.
KPMG’s national head of tax, Rajeev Dimri, also welcomed Finance Minister Nirmala Sitharaman’s measures for ensuring that the relaxations given to common taxpayers have not derailed fiscal math, and the government has stayed on the path of fiscal consolidation.
Pointing out to the Goods and Services Tax revenue accretion over the last few months, he said the taxpayers should be credited for the performance.
The budget rightly “rewards” the taxpayers for their commitment, Dimri said.
LuLu Financial Holdings Managing Director Adeeb Ahamed said the budget is focussed with equal focus on traditional and emerging sectors.
Adeeb, who has significant investments in India’s financial services sector through LuLu Forex and LuLu Finserv, said the move to ramp up the credit guarantee scheme for MSMEs will give a fillip to enabling faster access to financial services.
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