4.1% fiscal deficit target a daunting challenge, asserts FM
3 Aug 2014 3:49 AM IST
‘I have accepted the figures and I moved on the presumption that the figures given in the Vote-on-Account of the Interim Budget by my predecessor (P Chidambaram) are correct. Therefore, I have maintained those figures in the larger interest of the economy,’ he said in Lok Sabha.
He was replying to supplementary questions. Jaitley, who presented his first Budget on July 10, said the government is going to endeavour for more economic activity, better growth and, therefore, higher tax buoyancy. ‘That seems to be the strategy at the moment,’ he said.
To a supplementary on providing subsidies or free power supply to farmers, he said a government can spend within its means. If it borrows to spend, the next generation will have to repay the debts. Debts, he said, means more taxes.
He also noted that empowering banks to seize property of defaulters has resulted in reducing bad loans of various banks from 14 per cent to two per cent in last one decade. A law was enacted in 2002 empowering banks to seize properties of loan defaulters and it has helped in bringing down bad loans, resulting in total gross non-performing assets ratio going down from 14 per cent to two per cent in 10 years, Jaitley said.
‘The Act is used against the industries substantially. After the government brought the law to seize the property of the loan defaulters, NPA, which was 14 per cent in 2002, has come down to 2 per cent in about 2-3 years. But after the economic slow down in last 2-3 years, NPA has again gone up to 4 per cent,’ the finance minister said during Question Hour.
Jaitley added that the banks take action against loan defaulters only when the situation really becomes bad and when the banks realise that there is no chance of recovery of loan or the borrower has no capability to repay the loan.
He said banks initially always try to give chance and time to restructure and run the industry or the agriculture properly. ‘If they (borrowers) can do that, there is no need to seize the property,’ he said. He said that banks take action against individual loan defaulter — be it an industrialist or a farmer — as per the guidelines issued by RBI from time to time.
He was replying to supplementary questions. Jaitley, who presented his first Budget on July 10, said the government is going to endeavour for more economic activity, better growth and, therefore, higher tax buoyancy. ‘That seems to be the strategy at the moment,’ he said.
To a supplementary on providing subsidies or free power supply to farmers, he said a government can spend within its means. If it borrows to spend, the next generation will have to repay the debts. Debts, he said, means more taxes.
He also noted that empowering banks to seize property of defaulters has resulted in reducing bad loans of various banks from 14 per cent to two per cent in last one decade. A law was enacted in 2002 empowering banks to seize properties of loan defaulters and it has helped in bringing down bad loans, resulting in total gross non-performing assets ratio going down from 14 per cent to two per cent in 10 years, Jaitley said.
‘The Act is used against the industries substantially. After the government brought the law to seize the property of the loan defaulters, NPA, which was 14 per cent in 2002, has come down to 2 per cent in about 2-3 years. But after the economic slow down in last 2-3 years, NPA has again gone up to 4 per cent,’ the finance minister said during Question Hour.
Jaitley added that the banks take action against loan defaulters only when the situation really becomes bad and when the banks realise that there is no chance of recovery of loan or the borrower has no capability to repay the loan.
He said banks initially always try to give chance and time to restructure and run the industry or the agriculture properly. ‘If they (borrowers) can do that, there is no need to seize the property,’ he said. He said that banks take action against individual loan defaulter — be it an industrialist or a farmer — as per the guidelines issued by RBI from time to time.
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