Industry & Economy
-
Budget
Waiver scheme to improve money supply in rural areas
At a macro-economy level, the general ‘Fiscal discipline’ evidenced in containing fiscal deficit and revenue deficit lends stability to the ‘ India Growth story” and benefits all its constituents.
At the sector level, the impetus given to the ‘rural economy’ is a positive development. By implementing some of the recommendations of the Rangarajan Committee report will ensure opening of more bank accounts in rural branches. The additional funds to SIDBI and Nabard will ensure additional fund flow into the sector. By increasing the corpus of rural infrastructure fund to Rs 14,000 crore, rural infrastructure will improve reducing our operational costs. The huge waiver of agricultural loans will improve money supply in rural pockets. The corpus to subsidise LIC cover for SHG-women with permanent disability is also welcome.
The Budget has , however, not addressed the MFI sector’s demands for withdrawal of service tax on all micro finance & micro insurance products and Dr Rangarajan Panel recommendation for 40 per cent exemption of the taxable profits of MFI-NBFCs. We reiterate the demands.
The biggest benefit for companies like SKS Microfinance is the withdrawal of ‘Banking Cash Transaction Tax’. This will greatly reduce ‘transaction costs’. The budget also augments credit flow to companies like SKS which can access the additional funds allocated to SIDBI.
Following the huge waiver of agriculture loans, PSBs may also choose to reduce direct lending and use units like SKS to funnel down credit to ensure better recovery.
S. Dilliraj, CFO, SKS Microfinance
More Stories on :
Budget |
Farm credit |
Rural Development
Article
E-Mail
::
Comment
::
Syndication
::
Printer Friendly Page
|
