The Hindu Business Line : ‘Debt waiver good for banks’

Upbeat: Mr R. Prasad, Chairman, CBDT, being received by Mr M.H. Dalmia, Chairman, Assocham Committee on Direct Tax, and Mr D.S. Rawat, Secretary-General, Assocham (centre) at a post-Budget seminar in the Capital on Saturday. —

Our Bureau

New Delhi, March 1

The budget announcement on Rs 60,000 crore debt waiver for the farm sector is actually good for the banks, according to Dr Shubhasish Gangopadhyay, Advisor to Finance Minister.

“This is because these are agricultural loans. There is no way the banks would have recovered if farmers did not pay and the banks would have taken the losses. Now, the banks are going to get some money,” he said, at a post-budget meeting organised by Assocham here. Stating that he did not understand the stock markets, Dr Gangopadhyay said that he did not really know why the bank stocks were the first ones to drop on Friday.

Recapitalising banks

“Banks will really be happy about this loan waiver, which means that Government is going to recapitalise them in some form or the other,” he said.

Dr Gangopadhyaya felt that the real criticism against loan waiver could be that it is being given to even small and marginal farmers who could repay the loan. “This is a loan waiver and not a NPA write-off. The real criticism should come from the fact that a loan, which could be repaid is also waived off,” he added. The Central Board of Direct Tax (CBDT) Chairman, Mr R. Prasad, described the budget as historic, highlighting that the tax payer would benefit in a big way on account of changes in the tax slabs. He also pointed out that corporates would benefit from direct tax proposals and that there was no reason for them to feel alienated.