Nirmala Sitharaman all set to present union budget for 2023-24, Modi govt’s final full budget prior to 2024 Lok Sabha elections

Finance Minister Nirmala Sitharaman is set to release the union budget for fiscal year 2023-24 on 1 February. This budget is the final overall budget of the Modi government before the 2024 Lok Sabha elections.

Like the previous two union budgets, this budget will also be delivered in paperless form with preparations starting on October 10, 2022.

Over the past 20 years, only two of the four full-year budgets submitted before general elections have had a significantly larger share of rural spending compared to defense and infrastructure. As the Indian economy is recovering from the effects of the pandemic and a potential global recession is well ahead, this budget will be closely monitored to gauge growth. One such sector is banking.

Budget 2019-20

Nirmala Sitharaman announced a recapitalization of the Public Sector Bank (PSB) of Rs 70,000 to increase credit, part of the Rs 3 billion capital injection previously announced in her first coalition budget as her Finance Minister. Moneycontrol reported that the government had injected Rs 64,612 to PSB for a Rs 70,000 plan.

The minister also aimed to inject about 1 billion rupees into non-bank financial companies (NBFCs) through state-owned banks.

A key initiative of the budget was the handover of regulation of the housing finance sector from the National Housing Bank (NHB) to the Reserve Bank of India (RBI) for efficient regulation.

Budget 2020-21

In her second budget, the Treasury Secretary announced the sale of government holdings at IDBI Bank to private buyers. The Government has also injected Rs 550 billion in fresh capital through PSB’s interest-free securities.

The center also announced a proposed amendment to the Bank Regulation Act for commercial banks. This is to strengthen the expertise of banks and improve governance through RBI. The limit for NBFCs eligible for debt recovery will also be reduced from Rs 1,000 to Rs 5 million in loan size.

According to Moneycontrol, the government expects to complete the process of selling its stake in IDBI Bank by the first quarter of fiscal 2024.

Budget 2021-22

The 2021-22 Budget proposes the establishment of an Asset Reconstruction Company (ARC) to address asset-related issues, the privatization of two PSBs and one general insurance company, and an injection of crores 20,000 into the PSB.

Nirmala Sitharaman said in her budget speech: present.”

According to RBI, ARC’s performance lacked vitality in terms of ensuring business recovery and revival. The government has injected Rs 150 crore into PSB for the 2021-22 fiscal year, the report added.

Budget 2022-23

In his budget speech, Sitharaman proposed launching digital rupees and 75 digital banking units (DBUs) in 75 locations across India.

Presenting the 2022 budget at Lok Sabha, Sitharaman proposed that “Scheduled Commercial Banks establish 75 digital banking units in 75 districts across the country to strengthen digital banking initiatives and celebrate the 75th anniversary of independence”, Sitharaman said. .” said in the Lok Sabha. .

The center has also introduced a digital rupee or Central Bank Digital Currency (CBDC) to be issued by the RBI using blockchain.

The report added that it proposed to strengthen financial inclusion by bringing all 150,000 post offices operating in India under the umbrella of digital banking.

Prime Minister Modi launched 75 DBUs in October 2022. Of those, 48 were taken by PSUs and the rest by private sector banks.

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