The Prime Minister on Friday said the Union Budget has carried forward the government’s vision of strengthening India's financial sector to spur growth and fuel the mission for an Aatamnirbhar Bharat.
“There is a lot of potential for banking and insurance in our economy. Several initiatives have been announced in this budget including privatization of two public sector banks, permitting up to 74% FDI in insurance and listing Initial Public Offering for LIC” the PM said. He was speaking at a webinar on effective implementation of the Budget proposals for the financial sector.
Public sector banks still needed
The Prime Minister said that private enterprises are being promoted wherever possible, but along with this, an effective participation of the public sector in banking and insurance is still needed by the country. To strengthen the public sector, equity capital infusion is being emphasized.
He also talked of a new Development Finance Institution for development of infrastructure and industrial projects to cater long term finance needs of such projects. He also talked of encouraging sovereign wealth funds, pension funds and insurance companies to invest in infrastructure.
The Prime Minister said, in the name of “aggressive lending,” the banking sector and the financial sector in the country was severely harmed 10-12 years ago. Steps have been taken one by one to free the country from non-transparent credit culture. He said now instead of brushing the NPAs under the carpet, it is mandatory to report even one day NPA.
MSMEs and startups
The Prime Minister emphasized the crucial role that MSMEs and startups are expected to play in the push for a Aatamnirbhar Bharat.
He said Aatamnirbhar Bharat will not be made only by big industry and big cities. Aatamnirbhar Bharat will be created in the villages by the hard work of small entrepreneurs and common people. He said the government has carried out several reforms and opened up many sectors like agriculture, coal and space for MSMEs.
The Prime Minister said as our economy gets bigger it is equally important for credit flow to start growing rapidly. He lauded the excellent work of our Fintech startups in creating new and better financial products for new startups and their exploration of every possibility in this sector. He added our Fintechs have a very high participation in the startup deals that have taken place in the Corona period as well. He cited experts that this year also there would be a great momentum for the financial sector in India.
Jan Dhan and Kisan accounts
The Prime Minister said, over the years, better use of technology and creation of new systems has played a very big role in financial inclusion in the country. He noted that today, in the country, 130 crore people have Aadhar Card and more than 41 crore countrymen have Jan Dhan accounts.
About 55% of these Jan Dhan accounts are of women and about one and a half lakh crore rupees are deposited in them. He further said with the Mudra scheme itself, loans worth about Rs. 15 lakh crore have reached the small entrepreneurs.
The Prime Minister informed that under PM Kisan Svanidhi Scheme about 11 crore farmer families have received more than Rs 1 lakh 15 thousand crore directly in their accounts.
