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Budget 2011-12: Not too many positives
MrAshvin Parekh, Partner and National Leader, Financial Services, Ernst and Young : The Budget does not contain too many positives for the banking sector and the overall impact on it is likely to be minimal. The Rs 6,000 crore recapitalisation of PSU banks and increasing government equity to 58 per cent will strengthen the capital base of PSU banks but the capital requirement keeping is mind the strong expected credit growth is large and the gaps might remain. A larger policy direction on consolidation or lowering of government stake in PSU banks was expected. The Budget announcements have been very positive for mutual funds and corporate debt markets. Enhancement of FII investment limit to $40 billion will lead to further development and deepening of the corporate bond markets.
Ambitious targets
Mr Harsh Goenka, Chairman, RPG Enterprises : The allocation under infrastructure has been increased by over 23 per cent, and Rs. 30,000 crore of tax-free bonds is proposed to be issued to finance infrastructure development. It is heartening to see that the Finance Minister has taken fairly ambitious targets onto himself.
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