Finance Minister Nirmala Sitharaman on Sunday said the government’s disinvestment policy is not akin to selling the family silver, and that it will work with the RBI on the proposal to privatise banks.

Rejecting the Opposition’s charge, she said the disinvestment policy has been devised to ensure better spending of taxpayers’ money and scaling up PSUs in strategic areas.

“The family silver should be strengthened. Our objective is to prime the assets in PSUs...to scale them up so that they reach the maximum potential to meet the aspirations of a growing India,” Sitharaman said while addressing a meeting with industry leaders here on Sunday. “The government’s commitment is to ensure qualitative spending of taxpayers’ money for returns.”

She also said the government wants few public sector enterprises in specified sectors to do well, so that we can to ensure that tax payer money is spent wisely.

The Budget has proposed to privatise two public sector banks apart from IDBI Bank.

Later, addressing the media, the FM said disinvestment is a responsible, transparent and open process, and not a random act.

In the Union Budget 2021-22 on February 1, the Finance Minister had announced that the government has approved a policy of strategic disinvestment of public sector enterprises. “The policy provides a clear roadmap for disinvestment in all non-strategic and strategic sectors,” she had said.

The Centre has no plan to form any bank investment company that would house the government’s stakes in banks, she added.

On the proposal to form an asset reconstruction company, she it would not be a bad bank but a formulation to address the problem of banks’ non-performing assets.

The government may have to give some guarantees for the National Asset Reconstruction Company, she said, adding that the solution is driven by banks and not by the government.

The Minister also said that the banks are gradually getting out of the risk aversion, which had set in during the early days of the pandemic.

The proposal for the Development Finance Institute is based on past experience with IDBI, said Sitharaman. “The government alone can’t meet development requirements. The private sector also has a role and that is being facilitated legally. The government DFI will also work in competition and work better,” she said.

Adding to people’s burden through a ‘Covid cess’ had never featured in the government’s discussions ahead of the Budget, said the FM.

“The Prime Minister was clear that there should be not a burden of even one extra rupee on the public,” she said while noting that the Budget was finalised in the backdrop of revenue limitations.

The Minister also stressed that the government has full trust and faith in both business and taxpayers. It is now using big data and analytics a lot to weed out those who are misusing and playing the system.

“Revenue from goods and services tax has been increasing the last three months as the economy is reviving. There is also a big role of technology, which is plugging leakages,” she said, stressing that honest tax payers do not need to worry.

The government has taken steps for faceless assessment and appeal and has now proposed to reduce this time-limit for re-opening of assessment to three years from the present six years.

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