Union Budget 2021: Sitharaman defends privatisation of PSBs in interview with News18, says India needs more efficient banks

Finance minister Nirmala Sitharaman presented the 2021-2022 Union Budget on Monday. AP

In an exclusive interview to CNN-News18’s Rahul Joshi after unveiling the Union Budget 2021 on Monday, Union minister Nirmala Sitharaman weighed in on the key takeaways from the budiget and defended the Centre’s push for disinvestment, including two public sector banks.

“There is a need for more efficient banks in the economy. We can’t have laggards. We have engaged with the RBI in a big way on bank privatisation,” the finance minister said.

Speaking to Network18 Group Editor Rahul Joshi, Sitharaman said that the Centre is looking at setting up a holding company for banks’ bad assets to address the NPA issue. “We want to have a holding company, which will, with a formulation given, take the bad assets from the banks and put it into the holding company. It will have government participation but largely the IBA will do it,” she said.

#EXCLUSIVE – Finance Minister Nirmala Sitharaman (@nsitharaman) speaks to @Network18Group Editor-in-Chief @18RahulJoshi #BudgetWithNews18 | #FMtoNetwork18 https://t.co/NIgKWv8cCp

— News18 (@CNNnews18) February 1, 2021

The budget on Monday had announced a crucial Rs 20,000 crore recapitalisation for public sector banks to meet the regulatory requirements.

Sitharaman also said that the government has taken a holistic approach to the health sector, but at the same time, it didn’t want to fund the whole operation through taxation.

“With tax buoyancy kept conservative; and with disinvestment, an improved GST collection, we will hopefully be looking at better times,” she said.

“The pandemic and its impact is something, which we will have to keep in mind for the duration it will take for the economy to come back to that kind of a buoyancy and I have given the economy time,” the finance minister said.

The government on Monday budgeted Rs 1.75 lakh crore from stake sale in public sector companies and financial institutions, including 2 PSU banks and one general insurance company, in the next fiscal year beginning 1 April.

READ OUR FULL COVERAGE of 2021 UNION BUDGET HERE

The amount, however, is lower than the record Rs 2.10 lakh crore which was budgeted to be raised from CPSE disinvestment in the current fiscal year.

During the interview, Sitharaman also clarified that the agriculture infrastructure cess imposed from the new financial year would have no impact on the consumer or importers.

“I wanted to make sure that the money for funding infrastructure for agriculture got a head-on for which I’m earning a certain amount that can be used. In case of petrol and diesel, we have applied it on the additional excise duty which is purely Central Government’s money,” she said.

The cess will “not burden” the consumer or the importer, she added.

At her budget speech, Sitharaman had revealed several figures on MSP given to farmers by the Modi government in the current fiscal along with MSP figures of the UPA government in the 2013-14 financial year amid loud thumping from the Treasury benches.

On being asked whether the farmers’ concerns were justified over the provision of minimum support price (MSP) in the context of the new farm laws, Sitharaman told News18 that she was “surprised” that the farmers were “doubting the government’s intention” about MSP.

Thousands of farmers have been protesting against the laws for over two months at Delhi’s borders.

“The farmers’ concerns on MSP and their doubts regarding the government’s intention is surprising. They should come to the table and specifically tell us where the grievances are. Spending on MSP has been increasing manifold, I have data,” Sitharaman said.

The finance minister also asserted that the govt is willing to continue talks with the farmers.

“Farmers are probably misguided. I want them to talk. I want them to talk on the points of concern. We are willing to concede,” she added.

Following the budget, there was criticism from the several opposition parties as well as from section of the population, especially the salaried class and those involved in the hospitality and tourism industry.

During the interview, Sitharaman expressed hope that the people would understand the intent of the government behind the budget.

“I hope the three major points of the Budget have been well received. If they have been then I will be happy because I want the country to know the intention of this government,” says Sitharaman.

“We would have given more resources if we could,” she added.

Talking about facilitating a spending push, the FM said – “One thing is clear, if I had more resources to give, I would have given it to the people. The question of giving money so that an immediate demand-push happens also triggers another question: Will it be a meaningful trigger for a virtuous cycle to be triggered off?”