Describing the Budget as "the most pragmatic one", Reserve Bank deputy governor S S Mundra has said the emphasis on public investments, social sector and a wide section of the society will have a long-term impact on the growth.
"This is the most pragmatic Budget. The emphasis on public investments, on social sector and on a wide section of the society are all the measures which will have long-term impact on growth," Mundra told reporters on the sidelines of an Indian Bullion & Jewellers Association event here this evening.
Asked about Rs 25,000 crore earmarked for recapitalisation of the bleeding public sector banks, Mundra, a former commercial banker, said, "Though we had suggested that there could be slightly more capital allocation, this is an allocation that will be adequate for the immediate requirement for banks. Moreover, the FM has mentioned if there is need for more, they will find resources."
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On gold monetisation scheme, he said, "The present scheme is just a beginning. Going forward there will be always a room for innovation, to add more features to this scheme."
Finance Minister Arun Jaitley favoured consolidation of public sectors banks, which will see capital infusion of Rs 25,000 crore next fiscal -- the same as this fiscal and as announced earlier this year -- once their balance sheets are strengthened.
"The first and immediate agenda is to strengthen the banks. We will strengthen them by recapitalising the banks," he said at post-Budget interaction with the media.
"Thereafter we are willing to look at consolidation among subsidiaries, consolidation of subsidiaries with the principal bank, consolidation of a weak bank to a strong bank subject to overall 52 per cent discipline that we have laid down for ourselves," he said, adding over the long run, the government will bring down stake in public sector banks to 52 per cent.
