One look at the Budget and what it brings to the beholder is the lack of sensationalism, says Jeevandas Narayan, Managing Director, State Bank of Travancore.
“It is all about strategies, granular details, small steps in different directions, incremental improvements...and proceeds to give the big picture over the next three-four years.”
The banking sector is a proxy for the economy, he said in a panel discussion on the Budget proposals hosted here by KPMG India and moderated by G Vijayaraghavan, Member, Kerala State Planning Board.
There are lots of things in the Budget which taken together means better business for banks in the medium term, Narayan said.
Announcements on government spending more and putting money in people’s pockets provide for an ideal combination. It means more business for not just existing players but also for those coming in.
“In the benign interest rate scenario that we are looking in the medium term and inflation tracking along the lines expected by the RBI, we believe that soft rates are going to be a reality,” Narayan said.
“The announcement on reviving PPP with the government having a better say, means that stakes are going to be shared with others also.”
Narayan also lauded the move on a bankruptcy code. “There are economic assets lying out there; their economic value needs to be protected. Archaic laws need to be retired.”
New proposals for bringing down government holding in banks brought down to 51 per cent will mean that new dynamics will come into play.
“This will help with the need for raising the capital base as required under Basel III. This is a very good budget overall, and exciting days are here.”
Good policy proposalAccording to Thomas John Muthoot, Chairman and Managing Director, Muthoot Fincorp, the main cornerstones of the Budget are growth, investment, and job creation. A number benefits has been announced for the financial services industry, especially NBFCs.
Proposed moves in the gold sector will help reduce imports.
This means good tidings for the current account deficit scenario. Idle jewellery is sought to be sourced and mainstreamed.
This is as good a policy proposal as it comes. But implementation needs to be watched. Muthoot was also impressed by the Mudra bank concept which could change the face of the MSME sector.
MI Sahadulla, Chairman, Kerala Institute of Medical Sciences, regretted the reduced spending in healthcare.
K Nandakumar, President and CEO, SunTec Business Solutions, was of the view that the Budget didn’t deliver any big bang for the IT sector.