FM: Government to continue its Focus on Governance Reforms in Banking Sector



FM: Government to continue its Focus on Governance Reforms in Banking Sector; Basic Savings Bank Deposit Accounts (BSDAs) picks-up during the year 2015-16 in view of the Government’s initiative under the Pradhan Mantri Jan Dhan Yojana (PMJDY). 

The Union Finance Minister Shri Arun Jaitley said that there was considerable improvement in the opening of Basic Savings Bank Deposit Accounts (BSDAs) during the year 2015-16 in view of the Government’s initiative under the Pradhan Mantri Jan Dhan Yojana (PMJDY).
He said that BSDAs reached 440 million for the period ended September 2015 as against 398 million for the year ended March 2015. The Finance Minister said that as part of the Governance Reforms in Public Sector Banks (PSBs), the setting-up and structure of Bank Board Bureau (BBB) will replace the Appointment Board for appointment of Whole time Directors as well as Non-Executive Chairman of Public Sector Banks (PSBs) to formulate appropriate strategies for their growth and development. He said that the Government has replaced the earlier mechanism of Statement of Intent on Annual Goals for Public Sector Banks with Key Performance Indicators to make the targets generic and not bank specific so that the need to interact with bank is eliminated or minimized. The Finance Minister was making the Opening Remarks during his Pre -Budget Consultative Meeting with the representatives of Banks and Financial Institutions (FIs) here today.

Various suggestions were made ruing the meeting by the representatives of Banks and FIs. The major suggestions included increase in exemption limit to Rs.2.5 lakhs for savings under the Income Tax Act, incentives for encouraging cashless transactions including through Debit/Credit cards, focus on promoting growth and increase in public spending till private sector investment picks-up. Other suggestions include listing of non-life insurance public sector undertakings while retaining majority Government control, PFRDA regulations for PFMs could be drafted with a vision to promote the growth of NPS sector with commercially viable incentives. Other suggestions included broad based Government Capex spending, allow banks to issue off-shore INR bonds to cater to infrastructure requirements and regulatory treatment of these bonds at par with the domestic infra bonds guidelines.

Other suggestions included broad based FDI in agriculture sector, introduction of a New Crop Insurance Scheme backed by technology and fully integrated financial inclusion and biometric authentication initiatives of the Government. New Crop Insurance Scheme needs to be redesigned so that the compensation covers not only the cost of cultivation but also some part of the farmer’s prospective income. Other suggestions included digitization of land records to compensate farmers swiftly, direct distribution of fertilizer subsidies to farmers through DBT and savings thus accrued could be utilized for increasing public capex spending.

Other suggestions included interest rate of small savings schemes need to be rationalized and fixed at a five year Government Security yields. This alignment could be done on a quarterly basis so that small savings rate does not become an impediment in the monetary transmission process. Other suggestions included that income which is subject to distribution tax and subsequently exempted in hands of recipient be excluded from the scope of the Section 14A of the Income Tax Act or distribution tax be abolished. Special regime of taxation for income distribution by securitization trust, the Income Tax Act be suitably amended to allow Corporate Social Responsibility (CSR) expenses as business expenditure and amendment of Section 41 (4A) of the Income Tax Act to specify a period of retaining the transfer amounts in special reserves to fulfill the purpose of granting long term finance and release of capital in the financial system for deployment purposes.

Along with the Finance Minister Shri Arun Jaitley, the aforesaid Pre Budget Consultative Meeting with the representatives of Banks and Financial Institutions was also attended among others by Shri Jayant Sinha, Minister of State for Finance, Shri RP Watal, Finance Secretary, Shri Shaktikanta Das, Secretary, DEA, Dr. Hasmukh Adhia, Revenue Secretary, Ms. Anjuly Chib Duggal, Secretary, Financial Services, Dr. Arvind Subramanian, Chief Economic Adviser (CEA). Among the representatives of the various Banks and Financial Institutions included Shri Urjit Patel, Deputy Governor, RBI, Ms Arundhatti Bhatacharya,Chairman, SBI, Shri BB Joshi, Executive Director, Bank of Baroda, Shri Bharath Sondur, Janaagraha, Shri SK Roy, Chairman, LIC, Shri S.B.Nayar,Chairman &MD, IIFCL, Shri Kishore Kharat, CMD, IDBI Bank, Shri HK Bhanwala,Chairman, NABARD, Shri Ashwani Kumar, Chairman, Indian Bankers’ Association(IBA), Ms Shikha Sharma, MD&CEO, Axis Bank, Shri Pramit Jhaveri, CEO, CITI Bank, Shri Adtiya Puri, MD,HDFC Bank, Shri Rana Kapoor, MD&CEO,Yes Bank, Shri S.N.Kanan, ED, ICICI Bank Ltd, Shri M Udaia Kumar, MD, Share Microfin Limited, Shri YM Deosthalee, CMD, L&T Finance Holdings, Shri Milind Kamble, Dalit Indian Chamber of Commerce and Industry, Shri Vijay Mahajan, CEO,Basix-Microfinance Livelihood Institute and Shri CVR Rajendran, Chief Executive, Association of Mutual Funds of India(AMFI) among others. 
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FM: Inclusive growth is high on the priorities of the present Government; Government will take adequate measures to ensure social security for children, women and senior citizens of the country. 
The Union Finance Minister Shri Arun Jaitley said that the inclusive growth is high on the priorities of the present Government and the Government will take adequate measures to ensure social security for the children, women and senior citizens of the country. The Finance Minister was making the Opening Remarks during his Pre -Budget Consultative Meeting with the representatives of different Social Sector Groups here today.

Various suggestions were made by the representatives of the different Social Sector Groups during the aforesaid meeting. Some of the major suggestions made during the meeting include increase in old age pension from Rs. 200 to Rs. 500, increase in pension for widows, inclusion of grandparents as a separate entity under Rashtriya Swasthaya Bima Yojana (RSBY). Other suggestions include higher allocation for Integrated Child Protection Schemes, need to recruit trained and qualified teachers to meet the requirements of Right to Education (RTE) Act2009, need to increase allocation for training of School Management Committee members and strengthen community mobilization.Other suggestions include increased budgetary allocation in secondary education and universalize education for children upto 18 years of age and improving financial transparency in Sarv Siksha Abhiyan (SSA) and thereby improving the implementation of RTE Act across the country.

Other suggestions included insurance to farmers as a major initiative to address the distress in agriculture sector and for achieving higher agriculture growth, adequate provisioning towards a comprehensive and universal crop insurance scheme, extending crop insurance to all farmers for all crops and considering lower units as a unit of insurance with 100% insurance premium to be borne by the Government. Other suggestions in this regard include provisioning of higher credit and other input subsidies to small and marginal farmers, tenant farmers and farmers with oral lease, increase budgetary allocation for National Mission for Sustainable Agriculture under Krishi Unnati Yojana and for strengthening the institutional mechanism for better utilization of available funds under Rashtriya Krishi Vikas Yojana.

Other suggestions included creation of National Social Security Board with sufficient budgetary allocation for providing social security to the workers of unorganized sector as well as provision of interest subvention for economically weaker sections and low income group sections for taking benefit under Pradhan Mantri Awas Yojana. Other suggestions included adequacy of budgetary resources for social sector, enhancing budget transparency at the district and sub-district level among others.

Suggestions were also made to address violence against women by making adequate budgetary outlays in the forthcoming Union Budget for implementation of Protection of Women from Domestic Violence Act, 2005, assistance for construction of shelter homes for single woman/destitutes and widows, utilization of ‘Nirbhaya Fund’ to institute substantive interventions for sector like health, urban development, public transport, education and other sectors that have a bearing on the safety of women. In order to meet the nutritional needs of women and girls, it was suggested to make higher allocations for Indira Gandhi Matritva Sahyog Yojana, review and scaling-up of Rajiv Gandhi Scheme for Empowerment of Adolescent Girls, higher allocation for ICDS Scheme and strengthening ‘Gender Responsive Budgeting’ among others.

Other suggestions included adequate allocation for the flagship schemes for children in the forthcoming Union Budget, timely disbursal, utilization and proper monitoring mechanism be placed in position to achieve desired outcomes. Children related legislation and commitments should be adequately resourced among others. Some suggestions were made regarding special planned focus for welfare of child labourers, street children, child domestic workers, children in conflict with law, anti-human trafficking initiatives and to stop child abuse in institutional and non-institutional set ups. At present there is an allocation of 0.06% on child protection in the budget which needs to be raised in the forthcoming budget. Some suggestions were made regarding special budget allocation for implementation of New Juvenile Justice Act as it will require setting-up separate children homes with skilled staff in all States/UTs for reformation of juveniles engaged in heinous crimes and higher budget allocation for protection of girl child. Other suggestions include higher allocation on health education and social protection of women at par with other developed countries, need for significant increase in spending for health from 1.3% to 5% of GDP as recommended by WHO, allocation of funds for Navjaat Shishu Suraksha Karyakram and ASHA Module 6 & 7 for all frontline health workers and higher allocation for Mid Day Meal Scheme among others.

Along with the Finance Minister Shri Arun Jaitley, the Pre Budget Consultative Meeting with the representatives of Social Sector Groups was also attended among others by Shri Jayant Sinha, Minister of State for Finance, Shri Shaktikanta Das, Secretary, DEA, Dr. Hasmukh Adhia, Revenue Secretary, Ms. Anjuly Chib Duggal, Secretary, Financial Services, Shri Shankar Aggarwal, Secretary, Labour and Employment, Dr. Arvind Subramanian, Chief Economic Adviser (CEA), Among the representatives of the various Social Sector Groups included Shri Amitabh Behar, National Foundation of India, Shri Sreedhar Ramamoorthy, Mines Minerals and People, Ms Deepa Sinha, Right to Food Campaign, Shri Subrat Das, Centre for Budget and Governance Accountability, Shri Ashok Bharti, Natoinal Confederation of Dalit Organisation, Shri Ambarish Rai, Right to Education Forum, Ms Sonali Khan, Breakthrough, Ms Meenu Venkateswaram, Pravah, Shri Ravi Duggal, Jan Swasthya Abhiyan, Shri Thomas Chandy, Save the Children, Shri Sandeep Chachra, Actionaid, Shri Pradeep S Mehta, CUTS, Ms Avani Kapur, Centre for Policy Research, Ms Rukmini Banerjee, Pratham, Ms Mirai Chatterjee, Self Employed Women’s Association, Ms Nandini Verma, Campaign for Tobacco Free Kids, Shri Mathew Cherian, Helpage, Ms Bhavna Mukhopadhyay,Voluntary Health Association of India and Shri Neereaj Jain, Wateraid among others. 


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