Show bank recapitalisation in Budget as fiscally non-neutral: CAG to govt

In a report tabled in the Parliament, the CAG said the the government made an investment of Rs 80,000 crore in 2017-18 and of Rs 1,06,000 crore in 2018-19 for the recapitalisation of PSBs

The Comptroller and Auditor General of India (CAG) has pulled up the government for not factually showing in 2017-18 and 2018-19 Budgets that bank recapitalisation of public sector banks (PSBs) is not fiscally neutral even though it is cash neutral .

In a report tabled in the Parliament, the CAG said that the government made an investment of Rs 80,000 crore in 2017-18 and of Rs 1,06,000 crore in 2018-19 for the recapitalisation of PSBs.

Funds for these investments were raised by the government through issue of non-transferable special securities to the same PSBs.

CAG noticed that in the expenditure budget the above