New Delhi: The government should bring down its stake in state-owned banks to less than 50 per cent, with the exception of three to four large public sector banks such as State Bank of India, Bank of Baroda and Union Bank of India, the Confederation of Indian Industry (CII) said Monday.
The industry body has also sought greater incentives for firms in next year’s Union Budget to encourage job creation. The Budget, to be presented by Finance Minister Nirmala Sitharaman on 1 February, will need to announce measures to revive growth at a time the economy is expected to register a sharp contraction due to the impact of the Covid-19 pandemic.
The CII made these recommendations to Sitharaman as part of the pre-Budget discussions between industry and the government. The Budget proposals should focus on growth, and alongside that, look at fiscal management from a three-year perspective, the body’s president Uday Kotak said in a statement.
“Aggressive disinvestment and monetisation of assets can augment government revenues at a time when tax revenues have fallen sharply,” Kotak said.
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Key proposals
The CII has proposed that government expenditure should focus on infrastructure and healthcare and sustainability.
“The Budget proposals should also address two critical areas of boosting private investments and providing support for employment generation,” added Kotak, the managing director of Kotak Mahindra Bank.
The CII also advocated financial sector reforms, such as setting up government-owned, professionally managed development finance institutions for key sectors of the economy. Anticipating a rise in bad loans on account of the pandemic, the industry lobby proposed multiple bad banks.
It also sought higher incentives for job creation under Section 80JJAA of the Income Tax Act. Under this section, companies are eligible to claim a 30 per cent deduction on salaries paid to new employees, provided their salaries do not exceed Rs 25,000. The CII has sought that this cap be raised to Rs 50,000.
There are no demands for any cuts in tax rates or more exemptions, but it has sought an extension of the dispute settlement scheme — ‘Vivad se Vishwas’ — till 31 December 2021, and asked that all appeals pending as on 30 June 2021 should be considered eligible for the scheme.
Disclosure: Uday Kotak is among the distinguished founder-investors of ThePrint. Please click here for details on investors.
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Indirectly Govt admits it’s inability to run PSBs efficiently and profitably . There is no system to hold themselves accountable for Bank- failures. Corporate defaulters in and out of this country walk freely . Let them better sell it for the highest price offered and be damned . Hence Reduction of stake initially and later on Full exit is a foregone conclusion.
Capitalist are waiting like Vulture to use Public Sector Bank’s networks and its deposits in the name of reform.Niether government nor their advisors are not talking any word about corporate defaulter. The Government is very serious and correct to save our border. But it seems confused and lacks in acumen to lift its economy .
Now we understand how this government is taking so many mindless decisions as they are surrounded by a coterie of opportunists who are looting india in the name of growth by disinvestment.
Pathetic approach..they think like olx ad. , “Bechne ko paisa kamana smjhte hain”
CII HAS NOT SUGGESTED TO BRING BACK BACK MONEY AND MAKE THE DEFAULTERS TO PAY THIER DUES TO BANKS ESPECIALLY POLITICAL LEADERS TO BOOST UP INDIAN ECONOMY. IF IT IS DONE THERE IS NO NEED TO SEARCH FOR FOREIGN INVESTMENTS AND NO MUCH FIRTHER REFORMS R NEEDED.
How can they suggest that sir. After all, all the defaulters, who amassed huge black money, are of their community…I.e. CORPORATES. Poor people, who got 2 room quarter from govt., without basic facilities like water and drainage, fail to repay small loan, they are real Defaulters and should be dealt with seriously. AlAS…what a great strategy by so called ‘intellectuals.’.
Okay, so basically Mr. Kotak is saying that divest from the PSBs and invest that money in his bank all in the name of employment. Wow!!! So he can have that so-called government money on taxpayer’s expanse. What about the jobs here in PSBs? Do you have any idea for that too? Do you even know how hard it is to get a government job? Now we have it, we are completely out of security. Just because of people like this man. Every businessman talking about divestment of PSBs have already a defaulter in a PSB. So yes, this is the idea behind it all.
Vika sayche ho sagla