New Delhi: Finance Minister Nirmala Sitharaman will present the Union Budget for the financial year 2022-23 on February 1, 2022. Several experts of the banking sector have pointed out their requests, which includes increasing the cap on foreign direct investments (FDIs) and considering the step to reduce the government’s stake in public sector banks.
According to Dr Arun Singh, Global Chief Economist, Dun & Bradstreet, the government should consider allowing financial institutions to claim 100% tax deduction for bad and doubtful debt provisions. Singh pointed out that the step is necessary as stressed assets are expected to increase significantly.
He also pointed out that the Centre should consider policy measures to reduce its stake in public sector banks. “Policy measures to address the governance, management, and operational issues faced by public-sector banks is expected. A roadmap to reduce the government’s stake in public sector banks and consolidation is also expected,” he said.
Saurabh Tripathi, Managing Director and Senior Partner, Boston Consulting Group, said, “My expectation from the budget is bolder move forward in transformation of public sector banking industry. The economy is rapidly transforming with deeper penetration and adoption of technology.”
“Banking sector is set to have a fundamental makeover requiring institutions that have very strong tech, analytics and design capabilities. This transformation is very tough in the operating framework and constraints of public sector. Partial privatization where the government takes down the stake to below 51% is one way forward. It will test the resolve of the government. There is an easy way out to let the public sector banks slide into oblivion with slow decline and eventually sold off in crisis. Much like Air India. That will just deny Indian consumers and businesses better banking and Indian tax payers would be footing the heavy bill for the inefficiencies it sustains over long periods,” he added.
Meanwhile, Archana Elapavuluri, Founder of Pickright Technologies, pointed out that with digital payments, where the next focus should be on is on digital banking, many accounts opened under JAN DHAN YOJNA is not at all operational. Also Read: Rakesh Jhunjhunwala Portfolio: Ace investor raises stake in THIS Tata Group stock, have you invested?
“On a macro-level, technology should help the government achieve the vision of transforming India into a digital economy. This change is necessary to improve the overall economic efficiency of the country by reducing the role of cash in economic transactions, and ensuring people have access to better financial services and credit,” she added. Also Read: Walmart invites Indian sellers to expand overseas via US marketplace
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