Under partial credit guarantee scheme: Govt aims at approving proposals worth Rs 20,000 crore over next two weeks


NEW DELHI: The government aims at approving proposals worth Rs 20,000 crore over the next two weeks, under the partial credit guarantee scheme for non-banking finance companies (NBFCs) and home finance companies (HFCs), for further boosting consumption in the economy — which is seeing a six-year low growth rate — as the move will propel retail lending.

Detailing measures taken by the government, including support to NBFCs and HFCs, credit expansion of public sector banks, clearing dues of public sector units, reforms in capital markets and higher refund of taxes, chief economic advisor Krishnamurthy Subramanian said that 17 proposals worth Rs 7,657 crore were cleared within two days of the scheme getting Cabinet approval.

“Together, these four are intended to bring more cash flow and foster consumption in the economy. The government has focused on hearing all the views, including those of the public sector units on enabling retail credit by supporting NBFCs and HFCs, which are very important for credit and consumption in the economy,” he said.

About Rs 4.47 lakh crore had been sanctioned to NBFCs and HFCs to support retail lending, while Rs 60,314 crore of capital has been infused into PSU banks. Lenders have disbursed Rs 2.2 lakh crore to corporates and Rs 72,985 crore to MSMEs.

The Cabinet has allowed public sector banks to purchase high-rated pooled assets — rated BBB+ or higher — from ‘financially sound’ entities under the scheme to temporarily address liquidity or cash flow mismatch issues of otherwise solvent NBFCs or HFCs, without them having to resort to distress sale of their assets. The Cabinet also approved amendments to the insolvency law, which proposes to bar government agencies from attaching assets of an insolvent debtor undergoing bankruptcy resolution for prior offences, making such stressed assets more attractive to potential buyers.

READ  Trump official: Statue of Liberty poem welcomes immigrants from Europe

Finance minister Nirmala Sitharaman said the government has been very ‘quick-footed’ on bringing about changes to the insolvency and bankruptcy code (IBC), even when the latest amendments to the Bill were not approved by Parliament in the winter session.

“The government has been very quick-footed each time to respond to the developing situation of the public domain, where cases of NCLT or resolution are happening. Each time that we come up with amendments, we hope to have them passed at the earliest in the Parliament,” she said, but did not comment whether the government would take the route of issuing an ordinance to get the bill into effect.

Another measure aimed at improving consumption was personal tax refunds which rose to Rs 1.57 lakh crore till date this fiscal, compared with Rs 1.23 lakh crore last fiscal, showing an increase of 27%, revenue secretary Ajay Bhushan Pandey said.

Meanwhile, corporate rate tax cut to 15% and approval of Rs 25,000-crore realty fund for stalled housing projects, had led to increase in investor confidence, with record foreign direct investment (FDI) inflows of $35 billion in the first half of this financial year, versus $31 billion the same time last year.





READ SOURCE

LEAVE A REPLY

Please enter your comment!
Please enter your name here